This is a Constitution or By Laws of a SACCO
1) Name and Area of Operation
· The society shall be called Umoja Savings and Credit Co-operative Society Limited, herein after referred to in these by laws as ‘The Sacco society’ and its area of operation shall be within the republic of Kenya.
2) Registered Office/ Postal Address
· The registered office of the Sacco society shall be at Fair Centre Naivasha town, and the postal address shall be P.O BOX 45201 - 20117 Naivasha, Kenya. The official email address shall be info@umojasacco.org and Website: www.umojasacco.org.
· Notice of any change of postal address shall be given to the Commissioner for Co-operative Development, herein after referred to as ‘The Commissioner’, and to all members of the Sacco society through their last known address as per records held at the Sacco society within 90 days of such change.
3) Opening and Relocation of Sacco Society’s Branch
· The Sacco Society shall notify the commissioner in writing when opening a new branch, relocating or closing a place of business.
4) Interpretations and Definitions
· In these by-laws, unless the context otherwise suggests words or phrases shall be interpreted in accordance with the Sacco Societies Act 2008 and Regulations herein after referred to as the ‘Act’ and ‘Regulations’ respectively, the Co-operative Societies Act Cap 490 Laws of Kenya and the Rules made there under herein after referred to as the ‘Co-operative Act’ and ‘Rules’ respectively.
· In these by-laws where the masculine gender is referred to, it will be construed to include the feminine gender.
· In these by-laws save as otherwise expressly stated:
1. Supervisory Committee - means an oversight Committee elected by a delegates meeting of the society.
2. ‘Delegates’ shall mean a person who represents a group of a minimum five members and a maximum of twenty-five members from the same branch.
3. ‘A nominee’ means a person appointed by the member to inherit the shares, deposits and other interests in the society upon the death of that member.
4. ‘Applicable Law’ shall mean any other relevant law other than the Sacco Societies Act, 2008 and the Regulations, Co-operative Societies Act cap 490, Rules, and these by-laws.
5. ‘Board of Directors’ shall refer to the persons elected in a duly convened Delegates Meeting to govern the Business of the Sacco society as per these by-laws hereinafter referred to as the ‘board’.
6. ‘Commissioner’ shall mean ‘the Commissioner for Co- Operative Development as provided for in the Co-operative Act.’
7. ‘Core Capital’ shall mean fully paid up members‟ shares, capital issued, disclosed reserves, retained earnings, grants and donations all of which are not meant to be expended unless on liquidation of the Sacco society.
8. ‘Dividend’ shall mean members share of the surplus of the Sacco society which is divided amongst its members based on shareholding.
9. ‘Deposit’ means a sum of money received or paid on terms under which it shall be repaid with or without interest or premium and either on demand or at a time or in circumstances agreed by or on behalf of the person making the payment and the person receiving it.
10. ‘Delegates Meeting’ shall be a meeting (either ‘annual’ or ‘special’) for all members, but attended by representatives elected by the members, duly convened by the Sacco society to conduct its business.
11. ‘Member’ includes a person or a co-operative society joining in the application for the registration of a Sacco society, and a person or co-operative society admitted to membership after registration in accordance with the by-laws.
12. ‘Returning officer’ is a person appointed to oversee or conduct the elections of a co-operative society at a Delegates meeting.
13. ‘SACCO Society’ means a savings and credit co-operative society registered under the Co-operative Act.
14. ‘Share Capital’ shall mean member’s equity in the form of issued and fully paid up shares of common stock.
15. ‘Tribunal’ shall mean the Co-operative Tribunal established under the Co-operative Act to hear and determine disputes.
· Any questions concerning interpretation of these by-laws or any matters not provided for therein, errors and omissions shall be referred to the Commissioner or his representative as is applicable.
5) Objects
· The objects for which the Sacco society is established are to organize and promote the quality of life of the members by providing quality financial products and services.
· In particular, the Sacco society shall undertake:
1. To promote thrift among its members by affording them an opportunity for accumulating their savings and deposits and providing them with credit exclusively for provident and productive purposes, at fair and reasonable rate of interest; thereby enabling them to use and control their money for their mutual benefit.
2. To ensure personal growth through the introduction of new products and services that will promote the economic base of the members.
3. To ensure progress of members and Sacco society through continuous education programs on savings and proper use of credit, reduction of poverty, human dignity and co-operation.
4. To apply the co-operative principle of co-operation among co-operatives in order to promote members‟ interests. In furtherance to its objects, the society may affiliate to the relevant National Co-operative Union and the Apex society.
· For the attainment of the above objects, the Sacco society may do acts and things that are permissible under the Act and Regulations, Co-operative Act and Rules and these By-laws and all such other things as are incidental or consequential to the economic enhancement of its members interests provided such act is approved by the members in a Delegates meeting.
6) Co-operative Principles and Values
· In order to achieve its objects, the Sacco society shall act in accordance with the following
· In order to achieve its objects, the Sacco society shall act in accordance with the following
Co-operative principles and relevant values.
Principles
1. Voluntary and open membership
· The society shall always be guided by the principle of voluntary and open membership in its member recruitment drive without political, ethnic, religious, gender or social discrimination.
2. Democratic member control
· The society will be fully controlled by members who will have equal voting rights on the basis of one member one vote.
3. Economic participation by member
· Members shall contribute equitably to the capital of the society and share in the results of its operations.
4. Autonomy and independence
· The society shall operate on mutually acceptable terms with its stakeholders who will ensure its autonomy and independence.
5. Education, training and information
· The society shall foster reciprocal, on–going education programmes for members, leaders, staff and the community so that they can teach and learn from each other or from the appropriate resource persons in understanding and carrying out their respective roles.
6. Co-operation among co-operatives
· In order to better serve the interests of the members and the community, the society shall actively co-operate with other co-operatives locally, regionally, nationally and internationally.
7. Concern for community in Delegates
· The society shall show concern to the community in which it exists and operates.
Values
· The values of the society shall include self-help, mutual responsibility, equality and equity. It shall practice honesty, openness and social responsibility in all its activities.
7) Membership
· Membership shall consist of:
1. Original members who signed the application for registration.
2. All members subsequently admitted in accordance with these by-laws.
8) Qualification for Membership
· A person who possesses the following qualifications shall be eligible for membership:
1. Is residing within the Sacco society area of operation.
2. Has attained the age of 18 years.
3. Is of good character and sound mind.
4. Pays the entrance fee and share capital as prescribed in these by-laws.
5. Provided that no member shall belong to more than one Sacco society serving similar purpose.
9) Application for Membership
· Every applicant for membership shall complete an ‘application for membership’ form. This form shall be drawn to show all the information required for the purpose of registration of a member.
10) Admission into Membership
· An applicant shall be admitted to membership on application upon payment of a pre-agreed entrance fee and purchase of minimum shares as shall be fixed by the Delegates meeting from time to time.
· Upon admission the member’s name shall be entered in the membership register and a membership number issued.
· Members shall be admitted by the board subject to Confirmation by the next Delegates meeting.
· The member shall pay for a copy of the society’s by-laws at its actual cost to the society.
11) Refusal of Admission
· The board may refuse admission to a person after assigning reasons for their decision. Such a person, if otherwise eligible for membership, shall have the right to appeal to the next Delegates Meeting.
12) Rights of Members
· A member of the Sacco society shall have the right to:
1. Be represented by a delegate who shall attend and participate in decision making at all Delegates meetings of the Sacco society and vote;
2. Be elected to organs of the Sacco society, subject to these by–laws;
3. Enjoy the use of all the facilities and services of the Sacco society subject to the Sacco society’s by–laws;
4. All legitimate information relating to the Sacco society, including, internal regulations, registers, Minutes of Delegates meetings and supervisory committees reports, annual accounts and inventories at the Sacco society’s registered office.
13) Obligations of Members
· A member of the Sacco society shall have the obligation to:
1. Observe and comply with all the Sacco society’s by–laws and decisions taken by the relevant organs of the Sacco society;
2. Buy and pay up for shares, save consistently or make any other regular payments provided for in these By–laws;
3. Meet the debts of the Sacco society in case of insolvency in accordance with the provisions of the Co-operative Act and these by–laws.
14) Member’s Personal Statement
· Every member shall receive regular updates of their passbooks and upon request, a system generated statement at a cost , which shall contain particulars of membership, shares, deposits and loan transactions with the Sacco society.
15) Termination of Membership
· Membership in the Sacco society shall cease with effect from the date of:
1. Death
2. Withdrawal
3. Expulsion
4. Being certified insane.
5. Transferring all shares to another member.
6. Failure to remit regular savings and loan repayments for a continuous period of six months without valid reasons or leave of the Sacco society.
7. Ceasing to hold qualification for membership as specified in these by-laws.
16) Suspension and Expulsion
· The board may suspend a member, subject to the decision of the Delegates meeting to expel, who;
1. fails to fulfill his/her obligations to the Sacco society whether stated in these by-laws, Delegates internal regulations, a resolution of the Delegates meeting or in contravention of any other legal document, provided such a member has been called upon to do so but has failed,
2. Is convicted in a court of law for a criminal offence involving dishonesty or fraud or is, imprisoned for a period of three months or more,
3. Acts in any manner prejudicial to the interests of the Sacco society. This may include but not limited to incitement of other members, sabotage etc.
4. In case of an expulsion involving a board member or Supervisory committee member, the affected party shall be requested to step out during the deliberations and a representative of the commissioner shall be present to ensure a fair decision.
· Provided that, no member shall remain in suspension for a period of more than 12 months.
17) Procedure of Suspension and Expulsion
· Upon formal and written proof that a member has committed a violation punishable by expulsion, the board shall serve a thirty (30) days written notice to the member stating the reason(s) for the proposed expulsion and requiring him/her to file a defense.
· Upon the expiry of the 30 days and taking into consideration the member’s defense if any, the board shall initiate administrative inquiry and make a decision on its findings within 15 days. The Board may;
1. Suspend the member pending expulsion by the Delegates Meeting or
2. Impose any other punishment as may be in this By Laws or as may be directed by the Delegates meeting from time to time.
· The suspended member may appeal to the Commissioner if not satisfied with the decision of the Board.
· Where a suspended member does not prefer an appeal to the Commissioner, the board shall present its finding to the next Delegates meeting which may either lift the suspension or expel the member.
· The Commissioner shall determine the appeal and present his findings to the next Delegates meeting which may either lift the suspension or expel the member.
· A member who is expelled from the Sacco society shall have the right to appeal to the tribunal.
18) Withdrawal from Sacco Society
· A member may at any time withdraw from the Sacco society by giving at least sixty (60) days written notice to the board.
· Partial withdrawal of non-withdrawable deposits from the Sacco society shall not be allowed under any circumstances.
19) Payment on Cessation of Membership
· On cessation of membership, a person shall be paid the following less any outstanding obligations;
1. The deposits (both withdrawable and non-withdrawable).
2. Any dividends and interests due prior to the cessation date.
3. Any other funds other than shares held by the Sacco society on his/her behalf.
20) Nominee
· Every member shall nominate in writing one or more persons as nominee(s). The nomination shall be attested to by at least two witnesses who are members of the Sacco society.
· The names of such nominee(s) shall be entered in the nominee register.
· Provided that a member shall have the right to change his/her nominee(s) in writing in the presence of at least two attesting witnesses who are members of the Sacco society.
21) Payment to Nominee
· The Sacco society after obtaining such documentary proof of the death of a member as it may consider necessary, shall pay to the nominee the value of the deceased member’s deposits, interest and dividend after deducting monies owed to the Sacco society, if any.
22) Admission of Nominee
· A nominee may be admitted to membership of the Sacco society if qualified. The shares, deposits, interest and dividends due to the deceased member shall be transferred to the account of that nominee.
23) Funds of the Sacco Society
· The funds of the Sacco Society shall consist of:
Core Capital
1. Paid up member’s shares.
2. Retained Earnings.
3. Disclosed Reserves.
4. Grants and Donations.
Income
1. Interest, fees and charges, penalties, and commissions.
2. Entrance fee.
3. Any donations, grants or gifts from other bodies, organizations or individuals.
4. Funds obtained from other lawful miscellaneous sources.
5. Liabilities, which include deposits from members and borrowings from other sources.
Capital Adequacy
· The Sacco Society shall at all times maintain:
1. Core capital of not less than 10% of total assets
2. Core capital of not less than 8% of total deposits
3. Institutional capital of not less than 5% of total assets
· The funds of the Sacco society shall only be applied for the promotion of the stated objects of the Sacco society as set forth in these by laws, and shall be invested in:
1. Securities issued or guaranteed by the government or any agency of the government.
2. Deposits obligations or other accounts of deposit taking institutions under the banking Act.
3. Shares, stocks, deposits in, loans to or other obligations to any Sacco Society or Co-operative Society.
4. Loans to members.
5. Land, Properties and Equipment’s for purposes of Sacco business.
· Investments of the society shall not in the aggregate, exceed 25% of total assets, core capital and deposits of the Sacco Society.
24) Shares
· Every member shall hold at least 100 shares of Kshs.500/= each as shall be fixed by the Delegates Meeting. However, no member shall hold more than one-fifth of the total shares of the Sacco Society.
25) Transfer of Shares
· With the approval of the board, a member may at any time transfer shares to another member but not to any other person. Such transfers must be in writing and at nominal value.
· All transfers of shares shall be registered with the Sacco society and no transfer shall be valid unless so registered. A fee of Kshs.500/= shall be payable by the transferee for each such transfer.
26) Liability
· The liability of a member shall be limited to the nominal value of the shares held by him.
· In the event of liquidation, where available funds are insufficient to pay the full nominal value of the shares held by members; the funds shall be distributed pro-rata among the shareholders according to the amount of shares held by each.
27) Power to Borrow
· Loans may be obtained from non-members subject to the maximum amount and terms approved by the Delegates Meeting and registered with the Commissioner.
· For the securing of any loans accepted by the Sacco Society, the Sacco society may grant a charge over its assets. The Commissioner to grant a charge shall be reserved to the Delegates Meeting.
· The rate of interest on loans shall not exceed the current market rate.
28) Receipting of Money
· Money received on account of shares, deposits, Loans, interest’s fees, fines or any other monies received on behalf of the Sacco Society shall be recorded and evidenced as provided in the approved policies and procedures manuals.
29) Payment and Disbursement
· All payments made by the Sacco society shall be recorded and evidenced as provided for in the approved policy and procedure manual.
30) Delegates Meeting
· The supreme Commissioner of the Sacco society shall be vested in the Delegates Meeting of representatives elected by members.
· An Annual Delegates Meeting shall be convened within four months after the end of the Sacco society’s financial year.
· A special Delegates meeting of the Sacco society may be held when convened by the:
1. Board.
2. Commissioner.
3. Board within 15 days of receipt of a written request by at least two thirds of the delegates provided there’s balanced representation from delegates of all branches within the Sacco.
· Provided the request is deposited by registered mail at the Sacco society’s address or delivered to the General Manager at the Sacco society’s offices within normal working hours.
· If the Committee fails to convene a meeting within fifteen days of receiving notice under the Co-operative Act; the Delegates shall give notice to the other members of the Sacco society, stating the object and reasons for the meeting and the fact that the Committee has failed to convene the meeting.
· Any business not completed at the annual Delegates Meeting, may be taken up at a subsequent special Delegates Meeting of the Sacco society.
31) Notice of Meetings
· The Delegates meeting and any other general meetings with members shall be convened by giving at least 15 days written notice to the members.
· The Honorary Secretary shall take all usual steps to publish the notice of the meeting in public places, on the Sacco society’s notice board(s), use of mobile phones or any other mode decided by the members.
· All notices shall include a statement of the business to be dealt with.
32) Quorum
· Except when convened by the Commissioner, the presence of at least 25% of the total delegates, shall constitute a quorum for the conduct of business at the Delegates Meeting.
· If three hours after the advertised time of the meeting a quorum is not attained, the chairman shall adjourn the meeting and fix a date for another meeting within one month, which shall be advertised as prescribed in these by-laws.
· If a quorum is again not attained, the chairman shall declare the meeting open with those present one hour after the advertised time of the meeting.
33) Duties of Delegates Meetings
· The Delegates Meeting shall have the powers and duties prescribed in the Act, Regulations, Co-operative Act, Rules and these by-laws. It shall:
1. Consider and confirm the minutes of the previous Delegates Meeting.
2. Consider reports of committees, the Commissioner or his/her representative and the audited accounts on the Sacco society’s activities during the past financial year.
3. Consider and resolve on the manner in which any available surplus shall be distributed or invested, subject to the Act, Regulations, Co-operative Act and Rules.
4. Receive Board members elected at the branch level by members Elect or remove members of the board and the Supervisory Committee, subject to the Act, Regulations and these by-laws.
5. Fix the indemnity for the elected committee members and management staff.
6. Consider recommendations on expulsion of members and refusal of membership by the Board.
7. Fix the maximum liability which the Sacco society may incur in loans and deposits from non-members.
8. Approve the estimates of income and expenditure for the financial year following the Delegates Meeting.
9. Fix the honoraria, if any, for Board, officers or employees of the Sacco society.
10. Decide on the management structure, including the establishment of branches to facilitate efficient and cost effective delivery of services to members.
11. Appoint auditors and advocates of the Sacco society for the ensuing year.
12. Approve affiliation to National Co-operative Organizations for SACCO societies and the Apex society.
13. Transact any other business of the Sacco society for which notice has been given to members in the manner prescribed in these by-laws.
14. All members have a right to be represented in the Delegates Meeting. All delegates have a right to participate in its deliberations; however they may be required to identify themselves.
34) Record of Business
· All business discussed or decided at the Delegates Meeting shall be recorded without erasures and corrections in a Minute Book, which within one week of the meeting, shall be signed by the Chairman of the meeting and at least one other committee member who was present at the meeting, to indicate that in their opinion the minutes are a true and complete record of all matters discussed or decided at the meeting.
· At the next meeting after approving any alterations or variations which shall be written below the above signatures and not as alterations to the original record, the meeting shall by resolution authorize the chairman to sign and date the final record.
35) Eligibility for Membership to the Board
· No person shall be eligible as a member of Board of Director if he/she;
1. Has not been a member of the Sacco Society for at least three years prior to the Annual Delegates Meeting in which elections are held.
2. Has been adversely named by the Commissioner or his/her representative in an inquiry report endorsed by an Annual or Special Delegates Meeting for mismanagement or corrupt practices while still a member of the Board of a co-operative society or union in the last ten years, or named in any other national inquiries where he/she has been shown to be engaging in dishonest activities.
3. Has been charged of any offence involving dishonesty, a crime involving fraud, perjury or breach of contract of a licensed financial institution.
4. Has been convicted of any offence involving dishonesty or is imprisoned for three months or more with a crime involving fraud, perjury or breach of contract of a licensed financial institution.
5. Is delinquent on loans with the SACCO for more than 60 days within 2 years prior to elections.
6. Shall not have attained a minimum of ‘O’ Level Certificate of Education or equivalent; with a pass of a D+ and above.
7. Is declared bankrupt.
8. Is under 18 years of age.
9. Is of unsound mind.
10. Is a Board member of another existing Sacco society registered under the co-operative Act.
11. Is an official of or holds a political office at any level.
12. Does not conform to minimum qualification standards in accordance to the applicable law.
13. Has been removed from public office on disciplinary action.
14. Does not have a minimum of 1000 shares and minimum non-withdrawable deposits of Kshs.100,000/=.
15. Has not 60 days after being elected into office, declared wealth as per the Public Officer’s Ethics Act, filed an Indemnity (Form V) with the commissioner and signed the Sacco Society conflict of Interest Policy and Disclosure.
16. Is unable to read and write.
17. Is directly or indirectly a money lender or carrying out activities detrimental to the aims of the Sacco society.
18. Has been a member of the Supervisory Committee within two (2) years preceding the date of the anticipated election.
36) Elections
· The board shall notify the members of the vacancies arising in both the board and the Supervisory Committee.
· There shall be a Nominating Committee constituted as per the Sacco Electoral Policy formulated by the board to vet and clear the prospective candidates for elections.
· During elections, the Returning officer shall present duly nominated candidates for the vacant positions. Each candidate must have a proposer and a seconder.
· At the elections, members/delegates shall decide, by majority vote, the method of voting. The method may be secret ballot or queuing or by show of hands.
· No member shall be entitled to vote by proxy.
· Irrespective of the number of shares held by him, no member shall have more than one vote.
· Within fourteen (14) days of the elections, the General Manager shall forward to the Commissioner the names and addresses of all persons elected.
· A new committee elected shall not assume office unless they have been cleared and satisfied the requirements of the Co-operative Act, Rules and these by-laws as to the indemnity and ethics.
37) The Board of Directors
· The board shall be the governing body of the Sacco society elected from the general membership and shall consist of a minimum of 7 members and maximum of 9 members who are non-executive.
· The board shall include the Chairman, Vice chairman, Treasurer and Honorary Secretary all of whom shall be elected by the board from amongst the members of the board.
· Members of the board shall hold office for a period of three years.
· Where the membership of the board falls below five the committee shall co-opt qualified member(s) into the board until the next Delegates Meeting.
· If a member of the board shall fail to attend three consecutive meetings without being excused there-from or otherwise fails to perform his/her duties, the position may be declared vacant and the vacancy filled as provided for in these by-laws.
· If during the term of office of the board a vacancy occurs bringing the total number of board members to below five or to an even number, the committee shall co-opt a new member from eligible society members provided that the vacant position shall filled during the next elections as set out in these by-laws
· A retiring board member who has served the Sacco Society well shall be provided with a token of appreciation according to the recommendation of the board.
38) Board Meetings
· The board shall meet not more than twelve (12) times in a financial year and not more than two months shall lapse between the date of one meeting and the date of the next meeting.
· At least five board members shall form a quorum for the disposal of business
39) Record of Business of the Board
· All business discussed or decided at the Board Meeting shall be recorded without erasures and corrections in a Minute Book, which within one week of the meeting, shall be signed by the Chairman of the meeting and at least one other board member who was present at the meeting, to indicate that in their opinion the minutes are a true and complete record of all matters discussed or decided at the meeting.
· At the next meeting, after approving any alterations or variations, which shall be written below the above signatures and not as alterations to the original record, the meeting shall, by resolution, authorize its Chairman to sign and date the final record.
40) Duties and Powers of the Board
· The board of the Sacco society shall subject to any directions from the Delegates Meeting, direct the affairs of the Sacco society. Its procedures, powers and duties shall be as prescribed by the Act, Co-operative Act and Rules and these by-laws. In particular, it shall:
1. Observe in all its transactions the Act, Co-operative Act and the Rules, these by-laws and prudent business practices.
2. Establish and approve appropriate policies including human resource management, savings, liquidity, investment, dividend, risk management, membership administration, cash handling and information management and preservation.
3. Ensure that the management maintains proper and accurate records that reflect the true and fair position of the Sacco society’s financial condition.
4. Prepare and develop business plans and annual budgets for presentation at the Delegates Meeting.
5. Formulate the Electoral Policy to guide in the nomination and election process.
6. Appoint such number of board committees as maybe necessary to effectively discharge its functions.
7. Approve interest rates on loans, the maximum maturities and terms of payment or amortization of loans from time to time and the maximum amounts that may be loaned with or without security to any member as recommended by the Sacco society’s management.
8. Cause the audited accounts to be displayed in a conspicuous place at its registered office and branches at least two weeks before presentation of accounts to its members at the Delegates meeting.
9. Lay before the Delegates Meeting audited accounts, together with proposals for the disposal of net surplus, if any.
10. Recommend to the Delegates Meeting the dividend rate to be paid on shares, if any, and interest to be paid on non-withdrawable deposits.
11. Fill through co–option, vacancies occurring in the board between Delegates Meetings.
12. Authorize the conveyance of properties.
13. Authorize borrowing of the Sacco society in accordance with the law.
14. Approve and review lending policies of the Sacco society to ensure compliance with the Law.
15. Approve or ratify all loans to directors and employees of the Sacco society.
16. Approve interest rates on loans to members as recommended by the executive committee
17. Designate a depository or depositories for the funds of the Sacco society.
18. Prepare and approve a code of conduct for board, supervisory committee, staff and members.
19. Employ and fix the remuneration of the employees including the appointment of the General Manager in accordance with the approved human resource policy.
20. Impose penalties/fines as provided for under these by-laws.
21. Ensure adequate provisions for known and probable losses and recommend to the Delegates Meeting the write-off of bad debts.
22. Perform or authorize any actions consistent with the Act, the Regulations and these by-laws, unless specifically reserved for the Delegates Meeting.
23. To provide adequate budget for education and training of members, and the capacity development of the board and staff.
24. Receive and consider reports from the established Board committees.
41) Expenditure
· No expenditure shall be authorized by the board and/or management unless it is provided for in the estimates formally approved by the Delegates Meeting.
42) Legal Standard of Care
· In the conduct of the affairs of the Sacco society, the members of the board shall exercise the prudence and diligence of ordinary men of business and shall be held jointly and severally liable for any losses sustained through any of their acts, or failure to act, which are contrary to the Act or any other applicable law, these By-laws or the directions of the Delegates Meeting.
43) Delegation to Employees
· The board may delegate to the General Manager of the Sacco society such duties as it deems fit.
· Nothing shall absolve the board from its responsibility of overseeing the running of the affairs of the Sacco society in a proper and businesslike manner.
44) Indemnity
· All Board Members shall each provide an indemnity of an amount approved by the Delegates Meeting. A duly completed Form V in the schedule to the Rules shall be lodged with the Commissioner within 30 days upon election to the board.
45) Declaration of Wealth
· Every board member shall within 30 days of being elected declare wealth to the Commissioner in the prescribed manner.
46) Suspension of a Board Member
· The Commissioner may suspend from duty any Board Member charged in a court of law with an offence involving fraud or dishonesty pending the determination of the matter.
· The majority of the Board Members may suspend a Board Member and accordingly inform the Commissioner subject to ratification by the Delegates meeting for;
1. Failure to disclose vested interests.
2. Any other good cause.
47) Removal of a Board Member from Office
· A member of the board shall cease to hold office if he/she:
1. Ceases to hold qualifications of a Board of Director as specified in the Act, Regulations and these By–laws.
2. Is voted out by two-thirds majority of Delegates/members present at the Delegates or general Meeting where voting is taking place.
3. Is removed by the Commissioner under the provisions of Co-operative Act and the Rules.
48) Board Chairman and Vice Chairman
· The board chairman shall:
1. Preside at Delegates meetings, board meetings and joint meetings with the Supervisory Committee.
2. Perform such other duties as may be directed by the board, not inconsistent with provisions of the Act, the Regulations applicable laws and these by-laws.
· No person shall serve as a chairman for more than two consecutive terms and no person who has held office for two consecutive terms as chairman shall be eligible as chairman for a period of three years from the date of vacation of office.
· The vice chairman shall perform the duties of the Chairman during his/her absence and such other duties as the board may direct.
49) Honorary Secretary
· The duties of the Honorary Secretary are to:
1. Cause minutes of the Delegates Meetings, board meetings, and joint meetings with the Supervisory Committee to be recorded.
2. Ensure that notices of the meetings are prepared and sent out.
3. Ensure that the Sacco society’s correspondence is promptly and correctly attended to.
4. Perform such other duties as may be directed by the board.
50) Board Committees
· Board committees shall consist of persons drawn from the board.
· The board may delegate to the Board-committees some of its duties under these by-laws as it deems fit.
· These committees shall convene as directed by the board.
· The committees:
1. Shall keep minutes of their work at all times.
2. May delegate to the management staff any of their functions but shall ultimately bare responsibility.
51) Executive Committee
· The Executive Committee shall consist of four members from the board namely; the chairman, vice chairman, secretary and treasurer. Its duties shall be to:
1. Review and make recommendations to the board on the financial plans of the Sacco society ensuring its adequacy and soundness in providing for the Sacco Society current operations and long term stability.
2. Review, discuss and make recommendations to the board concerning significant financial planning, management and reporting issues of the Sacco society.
3. Review periodic financial statements of the Sacco society before submission to the board.
4. Consider and advice the board on investments and borrowings.
5. Make recommendations to the board on capital expenditure projects.
6. Ensure all expenditure of the Sacco society are within the approved budgets.
7. Monitor the management’s adherence to the procurement plans approved by the board.
8. Review and make recommendation on finance related policies including investments, capital adequacy and financial performance monitoring.
9. Ensure the Sacco society has liquidity management policies.
10. Review loan interest rates and other levies proposed by the management and make recommendations to the board for approval.
11. Review and make recommendations on appropriate Human Resource Policies.
12. Review the organizational structure of the Sacco Society and ensure it’s manned by staff with relevant skills and experience.
13. Ensure that periodic reviews of staff performance are conducted.
14. Examine and recommend Human Resource expenditure for approval by the board.
15. Ensure establishment of management succession plan in the Sacco society.
16. Ensure the management adheres to the approved human resource and related policies.
17. Ensure establishment and review of the internal control system.
18. Recommending three names of external auditors and the remuneration to the board.
19. Monitor external auditor’s independence and objectivity and report to the board on their findings and recommendations.
20. Appoint a tender committee in accordance with the provisions of the public procurement and disposal Act 2006.
52) Education Committee
· The Education Committee shall consist of three members appointed from the board. Its duties among others shall be to:
1. Review and recommend education programmes for members, board members, and the general public for approval by the board.
2. Monitor implementation of educational programs formulated to ensure that the staff and the board are well trained and prepared for the tasks they are entrusted with.
53) Credit Committee
· The credit committee shall consist of three members of the Board whose chairman shall be the board vice chairman. Its duties among others shall be to:
1. Ensure establishment and review of appropriate credit policy consistent with the relevant provisions of the Regulations and these by laws.
2. Ensure that the problematic loan accounts are adequately identified and classified as prescribed in the Regulations.
3. Ensure adequate provisions for potential loss is maintained.
4. Review periodic credit and loan portfolio reports of the Sacco society before submission to the board.
54) Supervisory Committee
· The Sacco society shall have a supervisory committee consisting of three members each elected at the Delegates Meeting for a period of three years and one member of the supervisory committee shall retire annually.
· No person who has been a member of the board within two (2) years preceding the date of the anticipated election shall be eligible for membership of the supervisory committee.
· The committee members shall:
1. Have qualifications & disqualifications similar to those of members of the Board.
2. Be required to have at least some knowledge of accounts.
3. Be removed by a resolution of the Delegates meeting or/and the commissioner if he no longer meets the qualifications of being a committee member.
· The supervisory committee shall hold quarterly meetings save for joint meetings between its members and those of the Board.
55) Duties of the Supervisory Committee
· The duties of the supervisory committee shall include:
1. Counterchecking, the effectiveness of the society’s internal control systems through:
a) Verification of all transactions of the Sacco society
b) Writing periodic report to be tabled at board meetings
c) Submission of its reports to the commissioner
d) Presenting its reports to Delegates meeting.
2. The supervisory committee shall not perform the duties or exercise any of the powers of the board.
3. The supervisory committee shall be held liable for any loss incurred due to their negligence in performing their duties.
56) The General Manager
· The General Manager shall be appointed by the board and shall be responsible for the day to day operations of the Sacco society and in particular ensure;
1. The implementation of and adherence to the policies, procedures and standards.
2. Systems that have been established to facilitate efficient operations and communication are followed.
3. The planning process that has been developed to facilitate achievement of set targets and objective is adhered to.
4. All staff matters, particularly human resource development and training are attended to.
5. Adherence to the established code of conduct.
6. Compliance with the Act, Regulations, Co-operative Act, Rules these by laws and any other applicable laws.
· The General Manager shall ensure that the board is frequently and adequately appraised on the operations of the Sacco society through presentation of relevant reports which shall cover, but not limited to the following:
1. Financial statements (monthly, quarterly and annual);
2. Showing current compared with past period actual performance, the budget compared with the actual and with explanations for any variances.
3. Capital structure and adequacy.
4. Delinquent loan list, and in particular growth in loans, loan losses, recoveries and provisioning.
5. Statement of comprehensive income (monthly, quarterly and annual) comparison with budgeted against actual.
6. Sources and application of savings and deposits.
7. All insider lending and non-performing insider loans if any.
8. Violation of the Act, these regulations and any other applicable law, and remedial actions taken to comply.
9. Large risk exposures.
10. Investment portfolio;
· The General Manager shall;
1. Attend all board meetings, board committees meetings, and general meetings and Delegates meetings as an ex-officio member.
2. Be a signatory to Sacco society accounts, cheques, contracts and other documents as may be necessary.
3. Perform such other duties as may be assigned by the board.
57) Books of Accounts and Records
· The Sacco society shall keep up to date and in a proper business-like manner, electronic or otherwise, such books of accounts and records as stipulated in Co-operative Act and Rules, and in particular:
1. A register of members showing in respect of each member:
· Name, age, date of application for membership, address and occupation;
· Date of admission to membership;
· Date of cessation of membership,
· Name and particulars of nominees,
· Any other information as may be required by the Sacco society from time to tim., and
· Number and Value of shares held
2. Minute books giving details of proceedings of board, Board committees, joint board and Supervisory Committee, Supervisory Committee meetings and all other committee meetings held in accordance with these by-laws.
3. Minute book giving details of proceedings at the Delegates Meetings.
4. A cashbook showing the details of all monies received or paid out by the Sacco society.
5. A General ledger containing such accounts as is necessary to accurately reflect the business of the Sacco society.
6. A personal ledger for each member showing his/her transactions with the Sacco society.
7. A register of society assets and property.
8. A register of loans to members showing in respect of each loan; the loan number, name of the borrower, the amount borrowed, the purpose of the loan, security, the due date of repayments and the date repayments were completed.
9. Such other books and records as the board or the Commissioner may decide or prescribe.
· The accounts and the financial records of the Sacco society shall be denominated in Kenya shillings and shall comply with international financial reporting standards and any reporting requirements prescribed by the Commissioner.
58) Policies & Procedures
· The board shall make and approve such policies and procedures as prescribed in the Act and as they deem necessary for the conduct of the Sacco society’s business.
· Any such policies and procedures shall be recorded in the minute book.
59) Code of Conduct
· The officers of the Sacco society shall comply with governance rules as prescribed by the ethics commission for cooperatives.
· The Sacco society shall formulate a code of conduct for use by Board, staff and general membership.
60) Common Seal
· The Sacco society shall adopt and use a common seal. The seal shall have an imprint bearing the words ‘Seal of UMOJA Savings and Credit Co-operative Society Limited’ which shall be different from the ordinary name-stamp of the Sacco society.
· The seal shall be kept securely under lock and key by the General Manager and be used only in the presence of the officers authorized to sign documents on behalf of the Sacco society.
· Where the common seal is used in any document it shall be authenticated by the signature of the board chairman and the General Manager or any other officer authorized by the board of the Sacco society.
61) Financial Year
· The financial year of the Sacco society shall be from 1st July to 30th June.
62) Distribution of Surplus Funds
· Subject to the Act and approval by the Delegates Meeting, the net surplus resulting from operations of the Sacco society during any financial year may be disposed of follows:
1. Credited to the Reserve Fund.
2. Disposed of as decided by the Delegates Meeting for:
· Paying dividends on shares
· Being forwarded to Education Fund or any other fund or funds of the Sacco society including the appropriations.
3. Paying honorarium to Board members and bonus to staff.
4. In any other way recommended by the board and approved by the Delegates Meeting.
63) Fines
· For any breach of these by-laws or lawful instructions issued by the Board and Delegates Meeting, or failure to honor his obligations on time, the member may be fined an amount not exceeding Kshs.50,000/=.
64) Disputes
· If any dispute concerning the business of the Sacco society arises:
1. Among members, past members and persons claiming through members, past members and deceased members; or
2. Between members, past members or deceased members, and the Sacco society, its committee or any officer of the Sacco society; or
3. Between the Sacco society and any other co–operative society; or
4. Between the Sacco society and the Commissioner
· Which cannot be determined by the board (or Delegates Meeting), it shall be referred to the Tribunal. Appeals shall be taken to the High Court.
65) Miscellaneous
· No board member or Supervisory Committee member shall receive from the Sacco society any payment apart from sitting allowance, travelling and subsistence allowance, except an honorarium from the net surplus as allowed in these by-laws.
· The board and supervisory committee members, and employees of the Sacco society shall hold in the strictest confidence all transactions of the Sacco society with its members.
· No member of the board or supervisory committee shall in any manner participate in the deliberations and determination of any question affecting his/her financial interest.
· A copy of these by-laws shall be furnished to every member who joins the Sacco society or on request upon payment of a fee not exceeding its actual cost to the Sacco society.
66) Inspection of Documents
· All books of accounts and other records shall at all times be available for inspection by the Commissioner, supervisory committee and the members.
· The by-laws of the Sacco society and the registration certificate shall at all times be available for inspection by the Commissioner.
· A list of members (excluding details of nominees and shareholdings, deposits and loans) shall be available for inspection by any member and any other stakeholder upon payment of a prescribed fee.
67) Dissolution
· The Sacco society shall be dissolved in accordance with the procedures set forth in the Co-operative Act and Regulations and the Rules.
68) Amendment of By-Laws
· These by-laws shall be amended in accordance with the Cooperative Act and the Rules, but no amendment shall become effective until it is approved and registered by the Commissioner.
69) Acceptance
· We the undersigned Board Members of Umoja Savings and Credit Co-operative Society Limited named herein do hereby accept these by laws for and on behalf of the Sacco society.
Chairman ……………………………. ………………. ……………
Vice Chairman..……………………… ………………. ……………
Hon. Secretary ……………………… ……………….. ……………
Treasurer …………………………… ……………….. ……………
Official Certification
I certify that the foregoing by-laws of the Umoja Savings and Credit Co-operative Society Limited have been approved and duly registered.
Given under my hand at Nairobi this ……………… Day of ………..………. 20………..
Commissioner for Co-operative Development
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