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Cooperative societies across Africa have been operating for decades to offer affordable financial services. They play a pivotal role in the socio-economic upliftment of millions of people, especially for the unbanked. 

They hold high potential towards employment generation, poverty reduction, GDP, enhanced standard of living and more. Considering their importance and the impact they make on society, cooperative associations like SCCULT, Ushirika, and the Tanzania Federation of Cooperatives in Tanzania aim to encourage and improve how cooperatives operate. These umbrella organizations focus on ‘capacity building’ to enhance their performance effectively. 

Capacity building is a process to develop and strengthen skills, abilities, processes and resources that an organization or a community needs to thrive in a competitive environment. This is done through system-wide planned efforts to increase performance. 

Capacity building for cooperatives

Capacity building for cooperatives can be defined (Capacity Building in Cooperative Organization, 2019) as a process of strengthening the linkages amongst the cooperative’s vision, mission, and goals as well as enhancing their abilities to deliver services in an affordable and sustainable fashion. 

Capacity building in cooperative societies can be achieved through focusing on resource management, organizational structure, technological development, IT adoption, successful planning and evaluation. 

For any cooperative society to perform well in this ever-changing environment, it must focus on developing the ability of its members and the society itself.

Performance of the cooperative society

The performance of cooperative stems from the capabilities of the members of the cooperative, which include, admins, managers, board of directors, and members. The capacity building seeks to enhance the performance of the individual members, work units and departments. It focuses on developing resources and skills required by the members to sustain themselves in this fast-changing world.

Leadership and governance of the cooperative society 

A cooperative society highly depends on the collaborative effort of the members that comprise the society. Capacity building improves the skills of the people at all the management levels, leading to better governance in society. It also improves the leadership capabilities and decision-making skills of the top management.

Optimum utilization of resources

Capacity building involves strategic planning and management of resources. It focuses on ensuring better use of the resources that are people, time, and money to achieve and sustain the cooperative goals. These resources can include the members of the society, financial resources available for loans and admin-related activities, and other resources that make a cooperative society. 

Financial management and record-keeping

Many cooperative regulations and acts like the SACCO Societies Act 2008 in Kenya demand cooperative societies to maintain proper records and accounts to show the true and fair state of affairs. Capacity building helps in developing the required skills of the members to meet the regulatory requirements through effective financial management and record-keeping.

Key takeaways

The concept of capacity building exists in major areas of cooperative societies. It is a crucial strategy to enable cooperative societies to perform effectively in line to achieve their goals. That said, umbrella organizations focusing on capacity building can bring substantial benefits to cooperative societies. However, successful implementation of such programs is required to reap the benefits. We will be discussing how technology can play a role in capacity building for cooperative societies in our coming blogs. Fill in the form below to stay updated with all our latest news and insights.