Co-operative Bank

Image Credit: Tuko.co.ke

The Genesis of Co-operatives 

By the start of the 1930s, at least four banks had established firm foundations in the Kenyan market. Of these, only one – the Post Office Savings Bank – accommodated Kenyans as clients. While the new decade may have seemed promising, racial segregation was still prevalent, and so it was barely a surprise when the Co-operative Societies Ordinance excluded Africans. 

Enacted in 1931, this Ordinance became the first legislation to govern the setting-up and registration of Co-operatives in the country. Among the first Co-operatives that were registered under the Ordinance were Kenya Co-operative Creameries (KCC) and Kenya Farmers Association (KFA) – both in 1931. One aspect of the Ordinance that could not be ignored was that Africans were prohibited from participating in co-operatives. 

Still, co-operatives steadily became tools for development.  

Time… and alterations 

In 1945, the Ordinance underwent change. In came the Co-operative Societies Act for the colonial government to increase supervision of the Co-operatives movement. These transitions coincided with that of the colony. Kenya was slowly inching into a time of inclusion and the tide was turning. That year the Ordinance permitted indigenous Kenyans to form and join co-operative societies. 

Soon enough, the Kenya National Federation of Co-operatives came about to promote the Co-operative movement. With time, ideas to set up a bank were thrown around. And by 1966 a Co-operative Society that would serve as a bank came to be. But it wasn’t until 1968 that a banking license was granted. 

A new bank in the market! 

On 10th January 1968 the Co-operative Bank opened for business. The Bank had a capital base of over Ksh 250,000 and became the first fully, locally-owned commercial bank! 

A month short of a decade later, Co-operative Bank registered a finance company, the Co-operative Finance Limited. Its role was to offer services similar to a financial institution for long-term financial requirements – though it was not until 1993 that the business became active. As for the Bank, because it only offered services to members of the Co-operative, it had its limitations. Another change would soon be implemented. 

Several steps forward 

The nineties may well be termed as the beginning of the peak season for the Co-operative Bank. In 1994 it became a fully-fledged commercial bank offering the full-range of financial services to members outside the Co-operative. Then in 1998, Co-operative Bank became MoneyGram International’s funds remittance business.  

In the decades since, Co-operative Bank has sustained growth, improved profit thanks to a consistent increase in customer accounts. By 2009 the Bank had a total of 74 branches nationwide!  

From segregated beginnings to inclusion and growth, Co-op Bank as we know it has a long history in the Kenyan market, and a bright future.