The Big Talk Now Is ‘Who Owns the Cooperative Bank of Kenya?’

The cooperative world in Kenya was surprised to learn who own the lucrative Cooperative Bank of Kenya. Started initially as a bank for and run by cooperatives, the Coop Bank, as the bank is popularly known, has enormously benefited from a monopolistic position. It has been, until only a few years ago, mandatory for all cooperatives to bank with the Coop Bank. That means that while other banks struggled to get clients, Coop Bank clients were delivered to it by a statute!

There was nothing really wrong in this, as long as it remained a bank for cooperatives. Cooperatives banked their money and got cheaper loans among many other services. But then, the bank was controversially registered as a company without revoking its cooperative registration, meaning it retained both the registration of a cooperative and a company. As a cooperative, it continued to receive money from all cooperatives in Kenya –willy nilly -with the force of law behind. And as a company, it could engage in extremely commercial activities, benefit only a few individuals and deprive the cooperatives of the privileges the bank was designed to confer.

Not a Cooperative and Yet a Cooperative

The government which is supposed to supervise the cooperative movement, found itself, in most cases, irrelevant as the bank could claim it wasn’t a cooperative. Yet it invokes its cooperative status when it wants special favors, like getting the government to enforce the law for cooperatives to bank exclusively with it or for it to remain the sole provider of services to the sector.

The result of all this is that many societies have found themselves entangled with the bank with spiraling, and expensive debts and services – including some of its top shareholders like Masaku Teachers Sacco Society. And many have collapsed – unless they are rescued by the government – crippled by indebtedness to very enterprise they set up to rescue themselves from debts. And worse, as company individuals can make more money from this collective enterprise than the cooperatives as revealed in the story of who owns the Cooperative Bank of Kenya? The revelation, was made by the Citizen TV in its program: Who Owns Kenya?

The revelation was that among the top share holders are actually the top employees of the bank – the Chief Executive Officer and the Chairman.

The Chief Executive Officer Mr. Gideon Maina Muriuki owns shares worth Shs 837,888,300 (about US $11, 969,833). That is equivalent to 68,121,000 shares or 1.95% of the bank.

Ranking of Top Shareholders of the Cooperative Bank of Kenya

Here is how the top 10 cooperative shareholders stood in relation to Mr. Muriuki’s shareholding in 2008:

· Harambee Sacco 3.7%,

· Teleposta Sacco 2.97%,

· Afya Sacco 2.94%,

· Masaku Teachers Sacco 2.90%,

· Kipsigis Teachers Sacco 2.46%

· Kenya Police Sacco 2.33%,

· Gideon Maina Muriuki 2.32 (the Bank MD),

· Kiambu Unity Finance Co-operative Union Limited 2.27,

· Nandi Teachers Sacco 1.78%,

· Aembu FCS Limited 1.77%

· Mungania Tea Growers Sacco 1.57%.

Last year, the bank earned profits of Shs 3.7 billion as a result of increased lending.