Fintech’s new application to benefit Sacco members

A Fintech Kenya official said the new software will enable Saccos to drastically cut down operation costs while serving members more efficiently, in line with requirements by the Sacco Societies Regulatory Authority (SASRA).

“Working through Kenswitch, Fintech will be able to provide Saccos access to over 800 ATMs across the country, enabling them to provide banking services to their members cost effectively,” said Tony Mbugua, Fintech Group general manager.

Mr Mbugua said the new solution would enable Saccos to revive stalled projects, ensure accountability of cash, cut down operation costs, and give a return on investment.

“Bearing this in mind, Saccos need to adopt global best financial industry business practices and information technology solutions,” he said.

The new platform comes as financial institutions and telecommunication companies have been forming partnerships and integrating their platforms as they seek to offer more convenience to their customers while cutting costs.

Transfer money

Major banks, including Barclays, Chase, Co-op, Ecobank, Equity, Family, KCB, NIC, and Standard Chartered, have agreements with mobile money operators such as Safaricom which operates M-Pesa; Orange, Airtel and Yu which operate Orange Money, Airtel Money, and Yu Cash platforms respectively.

Customers can also withdraw money using their phone accounts to transfer it directly from their bank accounts to a telecommunication company’s agent, or accessing their phone wallet through an ATM.

The move also comes five months past the June deadline by which Sacco’s that run front office service activities (Fosa) had to apply for a licence from the regulator, SASRA.

According to SASRA, 199 Saccos out of 211 applied for the licence — meaning that 12 will be allowed to offer normal savings and credit services without the benefit of Fosa services.

Fintech will initially be targeting the 199 Saccos that offer Fosa services as these are the ones which are allowed to provide banking services to their members.

Another firm that has launched software targeting Sacco’s and microfinance institutions is Flexus Technology .

Oscar Ahere, a product development manager at Flexus Technology, said that while some Saccos had started embracing the use of money transfer services such as M-Pesa, Zap, Orange Money and Yu Cash, they are were yet to link them with their back office financial data bases.

“With technology such as cloud computing, Saccos can now cut their operation costs by embracing the latest technologies which will help them trim the number of their field officers, reduce fraud, and increase efficiency,” said Mr Ahere.

Minimise errors

Flexus Technology’s web-based application, Kopesha, aims to help microfinance field officers using manual methods to minimise errors associated with manual entries.

Sacco field officers can use Kopesha to register members, manage savings, make loan applications, disburse loans, and receive loan repayments.

The software can be used on simple mobile phones that cost as low as Sh4,000.
As a result, Saccos may no longer require data entry clerks to update and reconcile information that the field officers or their members have submitted.

The system benefits not only the back office, but members as well as they can query their balance on mobile phones thus reducing transport costs incurred on visits to Sacco offices.

It costs an organisation that invests in software worth Sh100,000 about 25 per cent of the amount in annual licence fees.

However, by outsourcing the software, corporative societies don’t incur such fees. Instead users are billed for the number of transactions made.

dmugwe @ke.nationmedia.com