Saccos to invest Sh800m in a joint ICT platformThursday March 30 2023
The Co-operative Alliance of Kenya (CAK) has launched an Sh800 million technology platform to ensure the safety of depositors’ funds in savings and credit cooperative organisations (sacco) in the wake of growing fraud.
The Co-opTech platform, a financial technology company owned by the cooperative lobby, will oversee the security of depositors’ funds through a shared platform that will be used by all saccos in their daily transactions.
Launching the platform on Thursday, Co-operative Cabinet Secretary Simon Chelugui said the creation of the platform was long overdue as the idea had been conceptualised way back.
“The system will ensure the security of depositors' funds in saccos and assure them of the safety of their money in accounts,” said Mr Chelugui.
Read: Why Sacco is best avenue for SMEs to make savings
He said technology has become a driving force behind change in every industry and plays an integral role in sustaining co-operatives by offering the ability to manage resources, improve efficiency and create products and solutions in line with their needs.
Saccos will own the platform by buying shares. Small ones will pay between Sh350,000 and Sh500,000 while the big boys will part with up to Sh10 million as a one-off payment.
“Saccos pay up to Sh1.5 billion every year to different service providers who offer them a technology platform to protect deposits of their members,” said Daniel Marube, chief executive officer of CAK.
Mr Marube said the new platform will save money, which the saccos can use to extend loans to their members at affordable rates.
The new technology seeks to make affordable core banking services for the cooperative organisations that have been struggling to raise the huge budget to procure and maintain versatile transaction systems to deter fraud.
Read: Inter-sacco lending starts in six months
“The shared transaction platform will enhance reliability, and cyber security and make affordable services similar to the banking sector,” he said.
The platform is embedded with a shared fund management system that supports inter-sacco lending.