**3.2.2 Factors for success and challenges of HIMO SACCOS**

#### **Training**

Members and leaders of Himo SACCOS received training from various institutions outside and internally. These institutions include Cooperative Department of Moshi Municipality, from Banks and regular internal trainings offered by SACCOS to members by leaders who were already trained. The Cooperative Department offered seven training session to leaders and members from the year 2007 to June 2011. The type of training offered includes cooperative leadership entrepreneurship and rights and duties of members and leaders. CRDB and Uchumi Commercial Banks offered two trainings on effective use of Loan, recovery systems and entrepreneurship. Four trainings in these areas had been offered to members and leaders. This seems to be done if and only if there is an offer for a loan from these banks on demand basis. Internal training is done by leaders to members. This training type is offered on regular basis to keep the members informed of their obligations for organizational development. What is observed is that the training and education aspect is not given much weight. It is not taken to mean the preparation of the human resource for serving the SACCOS. This discussion shows Commercial Banks that have ties with the SACCOS should reduce the lending interest rate as it increases the cost in terms of the borrowings to the members. As well, they should give the requested loans on time.

#### **Legal, policy awareness and gender considerations**

The study found out that the Himo SACCOS has been adhering to the legal requirements. One indicator noted includes keeping copies of the Cooperative Policy; Cooperative Societies Act; The Cooperative Societies Rules; and their own internally developed by-Laws. However, it appears that though these are kept in SACCOS' custody, yet many of the members are unaware of them (inclusive of the Board Members). It is only the Loan Officer and the Cashier who make effective use of them. This is detrimental to the progress of the cooperative, which seems to be common to such organizations.

Himo SACCOS experiences gender balance in terms of membership, but with regard to leadership position, gender imbalances exists. The organization has a total of 289 members, of which 121 are female and the rest are men. The table below indicates the gender imbalances existing within the organization operations.


Table 2. Organizational structure

260 Urban Development

formation of Savings and Credit Societies to access financial resources to enable them have a voice on their land. Himo SACCOS which loans funds Himo Settlement dwellers was established in year 2006. It was born out of the desire of the Lutheran Church believers who were motivated by the Uchumi Commercial Bank, to form such an organization to fight against poverty in the neighborhood as well as checking down loss of farm land as the area changed its status from a Village to a Township. A total of 37 members were founders as a result of motivation provided by Clergy of the Lutheran Church. It operated as a precooperative group for almost a year. In March 2007, the Himo Savings and Credit Cooperative Society was registered with registration No. KLR 687 and started operations as

Members and leaders of Himo SACCOS received training from various institutions outside and internally. These institutions include Cooperative Department of Moshi Municipality, from Banks and regular internal trainings offered by SACCOS to members by leaders who were already trained. The Cooperative Department offered seven training session to leaders and members from the year 2007 to June 2011. The type of training offered includes cooperative leadership entrepreneurship and rights and duties of members and leaders. CRDB and Uchumi Commercial Banks offered two trainings on effective use of Loan, recovery systems and entrepreneurship. Four trainings in these areas had been offered to members and leaders. This seems to be done if and only if there is an offer for a loan from these banks on demand basis. Internal training is done by leaders to members. This training type is offered on regular basis to keep the members informed of their obligations for organizational development. What is observed is that the training and education aspect is not given much weight. It is not taken to mean the preparation of the human resource for serving the SACCOS. This discussion shows Commercial Banks that have ties with the SACCOS should reduce the lending interest rate as it increases the cost in terms of the borrowings to the members. As well, they

The study found out that the Himo SACCOS has been adhering to the legal requirements. One indicator noted includes keeping copies of the Cooperative Policy; Cooperative Societies Act; The Cooperative Societies Rules; and their own internally developed by-Laws. However, it appears that though these are kept in SACCOS' custody, yet many of the members are unaware of them (inclusive of the Board Members). It is only the Loan Officer and the Cashier who make effective use of them. This is detrimental to the progress of the

Himo SACCOS experiences gender balance in terms of membership, but with regard to leadership position, gender imbalances exists. The organization has a total of 289 members, of which 121 are female and the rest are men. The table below indicates the gender

mandated by Cooperative Society Act of 2003 of Tanzania.

should give the requested loans on time.

**Legal, policy awareness and gender considerations** 

cooperative, which seems to be common to such organizations.

imbalances existing within the organization operations.

**Training** 

**3.2.2 Factors for success and challenges of HIMO SACCOS** 

From the table above, one can rightly deduce and infer that there is a problem with regard to women participation in leadership positions at Himo SACCOS. There are only three women out of twelve leaders forming the Board and this is because it is a legal prescription. In the management there is only one lady cashier. The trainees tried to find out the reasons for such a problem, it came to their notice that basically two reasons are behind this problem. First, women are not ready to compete. This is much more motivated by cowardice and fear to stand before men. And the other reason is much connected with much concentration in other economic activities and reproductive functions. Women are worried that if they become leaders they won't participate effectively in other personal activities. The SACCOS administration is highly encouraged to make sure that women are also included in the leadership positions. It is not enough that they are members only. The study established that women are hesitant to join leadership position due to the nature of the Chagga society where male dominates. However, they should know their right of becoming leaders. Education will provide education and increase women awareness and understanding of their rights, including land property ownership.

#### **Effective mechanism of financial inspection and Auditing**

According to informants, inspection and auditing are normally done annually to ensure transparency in the use of public funds. The inspection was found to be done by the Municipal Council Cooperative department officers and auditing by a government auditing parastatal organization known as Co-opeative Audit and Supervision Corporation (COASCO). The two institutions normally examine Financial statements and based on Income and Expenditure of the SACCOS and give feedback report as supervisory report by Co-operative Officers and Management Audit and Annual Audit Report by COASCO Director General who is mandated to do so. However, it was strangely observed that inadequate funds hinder timely audit work. For example until June 2011, the financial report for the year 2009 and 2010 were not audited. This may lead to increasingly misuse of public funds through swindling of money which can lead to decline of SACCOS activities. It is likely this may discourage members to contribute to their organization and therefore decrease their income levels, levels of productivity and reduced faith in those in leadership position.

#### **Non-compliance with the law, principles & values**

Three Annual General Meetings are required as per Himo SACCOS bye-laws. Inspection and auditing of organization funds have to be done annually. Experience shows that there has been a departure from implementing the rules. The numbers of meetings were not exactly

Cooperative Development and Land Use Planning Dynamics in Sub-Saharan Africa:

in Kitotoloni village that has been included in the township boundaries.

This necessitated some of them joining Himo SACCOS to cope with urban life

Himo SACCOS has three tier type of leadership with different mandates as per their constitutional set up. This structure comprises of SACCOS' members, Board members and Supervisory Committee. Board members are elected by members during the Annual General Meeting (AGM). Members are supposed to make decisions during the Annual General Meeting where their voices are expected to be heard. The supervisory committee which comprises Manager, loan officer and Cashier who performs daily activities of the organisation. The supervisory committee officials are also members but in most cases are employed by SACCOS based on their area of expertise. The structure seems to be commendable but there is a problem in regard of the AGM. According to the interviewees, the Board is not complying with the by-laws because the number of meetings supposed to be held annually is not met as previously explained. In addition, knowledge on land and house mortgages observed are not clearly known to enable them understanding both formal and informal properties, which can be mortgaged by members to the cooperative society.

By June 2011, Himo SACCOS had 289 members, of which 121 are females and 168 are males. Members of this organization are involved in different activities which enable them to recover the cost of loan once borrowed. These activities include small-scale business persons, crop farming and animal husbandry. The organization is open for any member to join provided

she/he is living in Himo neighborhood as guided by the organization bye-laws.

**3.3 Leadership and governance** 

A Quest for Socio Solidarity Economy and Partnership in Sustainable Urban Development 263

In view to such land use developments for the township, the villagers protested against the planning intervention. This protest manifested itself as a conflict, which led into residents appealing in the court of law, seeking help for their land that has been changed from agricultural to residential use. The court of law has issued a stop order to planning and surveying of plots until when a consensus will be reached. The conflict has become an obstacle to the council's attempts to regulate land use change in Himo Township, especially

However, in the discussion with landholders (88% of the total respondents), they said that they are not opposing their farms to be part of urban area, however they were unhappy about the decision because of uncertainty about their lives in the changing social and economic setting in an urban environment. Government officials promised that each landholder whose land will be taken would be given first priority in allocation of new plots and be compensated in the process of land use planning and allocations. The landholders were not satisfied with this promise as they knew that once an area has been declared an urban area, the use of land will change to housing, institutions, and other uses. They also were aware that parceling the land into residential plots will cause change of traditional farm boundaries of individual land holdings. What they did not know is how they will survive in a township environment, as they already experienced that certain laws and regulations in towns prohibit activities such as free grazing, growing of crops such as maize and bananas. This restriction was perceived as a constraint in starting a cooperative that will or may help to market their products profitably and subsequently alleviate poverty. Most land occupiers depend totally on land for their sustenance. In addition, landholders know that once their land has been turned into an urban, they will not have freedom of using it as they desire. In this area, land is used by the owner and children to secure their livelihoods.

the number prescribed in the society Bylaws. It appears that leaders of this organization shun away from questioning by members especially on the use of members funds. Further, it was observed that, the issue of Auditing and Inspection are not given much serious attention by the SACCOS, the Cooperative Department and COASCO. Here we recommend that the Board, which is the organ responsible for running of the society, to make sure that the Bylaws are adhered to and the three meetings are held. This is for the sake of making the society alive and allowing members to get an opportunity to make their contributions for better running of the society to their advantage. Revising and transforming the Cooperative Societies Act and its better implementation seems to be a an enormous demand.
