State seeks new NSE counter to enable trade in co-operative shares

The Government is advocating the establishment of a trading platform at the Nairobi Securities Exchange (NSE) to cater for shares held in co-operative societies.

Industrialisation and Enterprise Development Cabinet Secretary Adan Mohamed said his ministry is in consultations with stakeholders in the capital market and co-operative movement to find ways to make co-operative shares transferable and appreciate in value as a business grows.

“In this regard, the ministry is promoting the establishment of a co-operative-shares trading platform at the NSE.

“This will enable members to freely transfer their shares and get value for them as and when the need arises. This will also attract other investors to the co-operative movement,” said Mr Mohamed.

EARN PREMIUMS

The CS, while addressing stakeholders in the co-operative movement at the 93rd International Co-operative Day celebrations at Uhuru Park over the weekend, said the creation of such a platform would allow societies to raise money to finance the projects outlined in their strategic plans.

It would also enable members to liquidate their savings and earn premiums, he added.

A few years ago, Unaitas Sacco faced regulatory difficulties when it tried to raise capital from the public by selling its shares.

“Discussions to establish the new platform are at an advanced stage and soon, co-operatives will be able to join the small and medium enterprises currently trading at the NSE under the Growth Enterprise Market Segment,” Mohamed said.

A technical working group comprising players such as the Capital Markets Authority (CMA) and Sacco Societies Regulatory Authority (Sasra), has been formed to iron out the details of establishing the trading platform.

If established, it would be the first of its kind in Africa and would enable members quickly transform their shareholding into cash.

Kenya’s co-operative movement is ranked the best in Africa and seventh-best in the world.

Currently, an estimated 50 per cent of the country’s population derives its livelihood from co-operative activities. There are more than 18,000 registered co-operatives, with a membership of 12 million.

Industry statistics show the savings and credit co-operative (sacco) sub-sector continues to play a key role in improving financial access, and has so far mobilised Sh501 billion in domestic savings with an asset base of Sh694 billion.