Community Cooperatives: A Model for Rural Development

Eric Olsen
January 12, 2010

Community Cooperatives Movement

Community cooperatives can reduce the gap between rich and poor, provide loans and insurance for farmers and small shop owners, and enable Kenya to advance as a leading nation like Korea and Japan, Hon. Joseph Nyagah, Kenya’s Minister of Cooperative Development, said at a forum at the Global Peace Convention in Nairobi in November 2010. Global Peace Convention is the annual meeting of the Global Peace Foundation, founded by Dr. Hyun Jin Moon.

“In Kenya the rich are very rich and the poor are very poor,” Hon. Nyagah said. “It is not right to have the rich living in a big walled homes and outside the walls are slums with the poor. This is a situation that breeds conflict.

“The cooperative movement plays important role in reducing tension in society by producing wealth and by operating democratically so that everyone has a voice. Conflict resolution on the grassroots level is solved when enemies are forced by the nature of the organization to negotiate and become friends.”

Community Cooperatives are voluntary and open to all without respect of gender, ethnicity, or religion. Members contribute services, resources, or capital and actively participate in setting policies and making decisions. A portion of revenues is set aside as common property of the cooperative, and surpluses can be used for developing the cooperative, setting up reserves, returning profits to members in proportion to their investments, and supporting other activities approved by the membership.

Minister Nyagah described how in Nairobi and other parts of Kenya matatu (independent transport) drivers have been organized into cooperatives where they are earning 30 shillings a day and are able to save and eventually own the matatu. He said that USAID looks to Kenya’s model of cooperatives as a way to involve young people in activities of development. “Instead of blaming the youth—many with college degrees—for being idle and leaving them ‘out there,’ cooperatives can bring them in and engage them in productive activities.”

In the future when the Korean, Japanese, or American investors come to Kenya, don’t just look for a wealthy partner, don’t look for a government partner, look at community cooperatives as partners.

Small donors have been able to establish a cooperative bank to service the needs of the poor, and today this bank is the fourth largest in Kenya, the minister said. A cooperative insurance company is now fifth largest in Kenya, and provides services to farmers and shop owners who previously we unable to get insurance.

“In next few months we will be creating a powerful instrument, the Cooperative Alliance of Kenya, which will be owned by 8 million cooperatives who collectively account for 30 percent of savings in Kenya and 33 percent of GDP,” Minister Nyagah said. “In the future when the Koreans, Japanese, or Americans come to Kenya, don’t just look for a wealthy partner, don’t look for a government partner, look at community cooperatives as partners. With good organization and a good environment, the cooperative model can make Kenya the next Korea or Japan. Our experience has also shown that if you want peace at village level or at national level, the cooperative movement has the structure to work for development and peace.”

Streets of Nairobi, Kenya.


Bernard Oluma of Seeds of Peace Africa emphasized the importance of volunteerism as an integral part of rural development. Citing the well-known example of teaching someone to fish as an intervention building self reliance, he cautioned that in some cases you may learn the skills but not have resources to buy equipment. “In Kenya sometimes even with skills and resources, there may be no access to river.” So volunteerism he said needs to include a comprehensive approach to development and poverty reduction.

“Our goals [at Seeds of Peace Africa] are poverty eradication, good governance, community capacity development, empowerment of low-income marginalized people, and gender balance. If we don’t tackle these issues we are just talking and not focusing on rural development.

Community Cooperatives initate volunteering opportunities.

Poverty is not merely the absence of money,” Oluma said. “Wealth is not merely the possession of money. And some essential resources in community are not just money. In Seeds of Peace Africa, for example, we encourage open farming. Someone contributes land, someone contributes labor, and others contribute equipment. At harvest they first pay off any expenses and then divide the profits. Do not limit your investment to money. The typical development approach is to gives out money, but nothing is changing because of dependency.”

The forum “Community Cooperatives, Self Reliance and Volunteer Service for Rural Development” was hosted on November 19, 2010 at the Global Peace Convention in Nairobi, sponsored by the Global Peace Festival Foundation. Other panelists included Dr. Ki Seok Kim, CEO of Educators Without Borders in Korea, and Mr. Masanobu Yamamoto, headmaster of Yamamoto private school in Japan.

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