Leverage tech to spur productivity in the sacco sectorTuesday October 06 2020
Advancements in technology have disrupted many sectors of the economy, leaving several companies to adapt and embrace the digital transformation that comes with such disruptions to stay afloat in business and offer effective and relevant services to consumers.
Close to two decades ago, banks dominated the financial lending space with people taking days or even months before they could secure loan approvals.
The dawn of mobile money in Kenya dictated a massive change in tack and strategy in the banking sector as many small players have today ventured into the scene to offer easy and affordable loans.
This has essentially eaten into a massive share of this resource that the banks had enjoyed for the longest time.
The discourse is the same in the transport sector. The conventional taxi drivers can hardly make a kill due to digitisation and the efficient solutions provided by players in the ride and shuttle-hailing industry such as Uber, Bolt, Little and SWVL. These players have made public transportation safe, accessible and affordable. That is what the consumer today desires.
This narrative fits the savings and credit cooperatives societies (sacco) sector. The sacco movement has been relevant for ages. Kenyans have embraced the sacco mentality and invested in the same for the longest time.
These investments have had significant impacts as they have changed the course of many lives, lifting many communities out of poverty.
Today the biggest saccos control billions worth of share capital invested. This situation calls for members to seriously consider a digital takeover in their saccos to work towards realising the full potential of the sector.
Such a move, if implemented, will boost efficiency and entrench financial inclusion in the industry, accommodating the underbanked and the unbanked, especially in rural Kenya who primarily depend on saccos for financial services.
A report by Financial Sector Deepening (FSD) Kenya opines that saccos are one of the primary sources of rural finance. In many rural areas, local saccos are the key providers of financial services.
Therefore, leveraging technology as an enabler for the digitisation of services in saccos will respond to the current specific consumer needs. This will grow productivity and increase member benefits even in the rural areas.
Internet penetration, connectivity and affordability in Kenya provides a near-perfect infrastructure to facilitate the migration of saccos from traditional processes to the efficient digital world.
Members also need to be sensitised and educated on the benefits of a digital system versus the standard system and its prospects.
Digital operations will herald the convenience of faster transactions in saccos, improved services and general members’ satisfaction.
Optimising operations will also guarantee security as most core banking platforms provide secure platforms for transactions hence ensuring the protection of member data and finances.
Most saccos that have today gone digital will attest to the enhanced productivity and efficiency of service that they enjoy.
Players in the industry must think innovatively and take advantage of the resources that are available to help secure the future of their saccos.