Murang’a County has adopted a report by the commission of inquiry on the area’s investment cooperative society popularly known as Shillingi kwa Shillingi (shilling by shilling).
The study calls on the county government to formally adopt the fund mobilisation model by forming a corporation to manage its deals.
The county corporation, as it will be called, is expected to provide a legal basis for managing Murang’a Investment Cooperative Society Limited (MIC) and other schemes that the devolved unit may develop.
“The commission appreciates the nobility of the idea and vision behind formation of the MIC, and its possible huge impact in the economic growth to Murang’a County. It therefore recommends that the county government considers forming a county corporation,” the 14-member tram said in its Report of the Commission of Inquiry into the Murang’a Investment Cooperative Society Limited dated February 8.
“Such a corporation will provide a legal and solid platform to accommodate entities such as MIC, and facilitate public-private-partnerships on various economic and development projects.”
MIC was registered on October 1, last year, as a co-operative society under the cooperatives Act. As of January 29, the initiative had recruited 3,000 members and raised Sh4.8 million.
“The commission recommends that the governor communicates and shares his vision both with his executive members and all other elected leaders in the county. This will elicit the support and goodwill of fellow leaders and the general public,” the team chaired by Mr David Ngugi noted.
The move to mobilise funds from the public had caused a stir with the Capital Market Authority (CMA) sending letter to Murang’a governor seeking details. In its letter, the regulator reminded the MIC officials of the various provisions of the law that the model needed to comply with.
The initiative was the brainchild of Murang’a County governor Mwangi wa Iria, who had asked area residents to use the society to save as little as Sh35 daily to fund projects in return for dividend. Audit firm Deloitte and Touché came in as the project managers.
The cooperative society had set a target of recruiting 100,000 people with annual member funds of up to Sh3 billion.
In light of the initiative and on realising a legal vacuum, the market regulator acting chief executive Paul Muthaura said CMA would work with the Sacco Societies and Regulatory Authority to develop a county financing collective investment tool that will provide a framework for capital-raising plans at the devolved government level.