The Battle for Your Vote: Why Tower SACCO Members Rejected the Delegate System in 2026

In February 2026, during their 50th Annual General Meeting in Ol’Kalou, the 240,000 members of Tower SACCO did something unprecedented: they unanimously rejected a government directive to adopt a delegate system of representation.

The directive, issued by the Commissioner of Cooperatives, required all SACCOs with over 5,000 members to move from direct voting to a system where elected delegates vote on behalf of the masses. While the state argues this move improves efficiency, Tower SACCO members argued it invites corruption.

1. SACCO Delegate System vs. Direct Voting: The Great Debate

The struggle between these two systems is essentially a debate between efficiency and democracy.

• The Delegate System (Efficiency): Proponents argue that hosting 240,000 people in one field is a logistical nightmare. By electing 150 to 500 delegates to attend meetings, the SACCO can make faster decisions and save on the massive costs of hosting physical AGMs.

• Direct Voting (Democracy): Tower SACCO members countered that the delegate system "pockets" the power. They argued that a small group of delegates is easier to compromise or manipulate by a board than a crowd of thousands. As one member put it: "The delegate system killed other societies; we cannot allow it here."

2. How Governance Affects Your Share Capital Value

Why should a buyer or seller on Saccoshares care about a voting system? Because governance is the "invisible hand" that determines your dividends.

• Transparency & Dividends: Direct voting ensures that the board is directly accountable to the owners. In the 2026 AGM, Tower members successfully questioned the board on maintaining a 13% dividend rate for a decade, forcing a public defense of the society’s financial health.

• Risk of "Capture": When governance is centralized (delegates), there is a higher risk of "mission creep" where boards invest in risky non-core assets without the true consent of members. This can lead to the very liquidity crises that cause SACCOs to be placed on the SASRA restricted list.

• Stability: Investors pay a premium for stability. The fact that Tower SACCO members are actively protecting their right to oversee the board makes their share capital more valuable on the secondary market.

3. SASRA and the 2026 Governance Reforms in Kenya

The government's push for the delegate system is part of a larger SACCO governance reform package for 2026. SASRA (Sacco Societies Regulatory Authority) has intensified its oversight to ensure that:

1. Fit and Proper Tests: Every board member must now pass a rigorous vetting process.

2. Audit Deadlines: All societies must submit audited accounts by March 15, 2026, or face penalties.

3. Digital Inclusion: Even with direct voting, societies are being urged to adopt online voting systems to bridge the gap between "direct democracy" and "logistical efficiency."