1. SUPERVISION OF A LARGE NUMBER OF SACCOS WITH LIMITED RESOURCES INTRODUCTION Lesotho is a land locked country surrounded by South Africa. Population is 1.9 million. ¾ of the country is mountainous and its size is 30 000 km².

2. COOPERATIVE MOVEMENT Cooperatives started as far back as 1948. Consists of handicrafts, agricultural, SACCOS, Services, consumer, and Multi- purpose cooperatives. 3 tier system that is being changed to 2. Also existing is growing number of youth or students cooperatives

3. STATUS AS BY TYPE ANALYSIS (MARCH 2007) SACCOS - 89 Agriculture 194 Handicrafts 35 Consumer 24 Multi-purpose 799 Services 6 Industrial 8 Unions 41

4. ROLE OF DEPARTMENT OF COOPERATIVES Supervision of Societies Training and education Research Registration and cancellation of societies Arbitration Business Counseling

5. SUPERVISION OF SACCOS Inspection done by 49 extension officers distributed around the country. Extension officers are supervised by the Entrepreneurship Development Division (EDD) of the Department of Cooperatives. EDD in charge of field operations. Liaises with other Divisions in the Department.

6. DEPARTMENT OF COOPERATIVES Has 5 Divisions 1.Legal Division in charge of registration, cancellation, arbitration 2.Audit Division in charge of Auditing 3.EDD in charge of field operations 4.SACCOS Division building capacity of SACCOS 5.Lesotho Cooperative College

7. SUPERVISION Encourage compliance with: 1.Cooperative Societies Act 2000 2.Bye-laws of the society 3.Ensure that books of the society are well kept. 4.Application of principles and values of cooperatives 5.Encourage good governance 6.Encourage quality control (services such as loans, savings mobilization)

8. SUPERVISION CONT’D Cooperative Law 1.Sect.36 Every Society is subject to inspection 2.Sect. 45 Every society to produce the moneys, securities, books, accounts or documents belonging to or relating to the affairs of the society. 3.Sect. 46 Each society should be inspected at least once a year. 4.Sect 47 Each society to submit to the Commissioner annual report, two certified copies of financial statements

9. SUPERVISION CONT’D Societies have sub-committees to facilitate internal controls: 1.Credit Committee 2.Supervisory Committees 3.Education Committees All responsible to the general membership like the Management Committee.

10. CHALLENGES Low rate of literacy Aging membership. Poor image of cooperatives, Coops associated with poverty. Dependency on foreign aid. Cooperative not perceived as an enterprise. Lack of disposable income in the rural areas. resulting in low savings and loan delinquencies. Cooperatives formed through the influence of donors. Interference of local authorities. Lack of compliance in some societies

11. STRENGTHS New emerging institutional cooperatives (teachers, civil servants, etc) Emerging youth and students cooperatives. Formulation of Financial Cooperative Policy. Revision of the Cooperative law and policy. Capacity building of staff of the Department of Cooperatives Introduction of Diploma in Cooperatives at Lesotho Coop College