By E, KNA
The County Government of Nakuru is promoting digitization of business models of Savings and Credit Cooperative Organizations (SACCOs) to make their operations more efficient and transparent while being responsive to their customers’ needs.
The devolved unit has been partnering with state agencies and development partners to initiate various training programs aimed at helping SACCO officials and members recognize the disruptive impact of new technologies on financial services.
County Executive Committee Member (CECM) for Trade, Cooperatives, Culture and Tourism Stephen Kuria told small and medium Savings and Credit Co-operative Societies to embrace technology in their operations to help bolster capacity and grow productivity in terms of reducing operational costs.
Such a move, if implemented, the CECM noted would help boost efficiency and entrench financial inclusion in the industry, accommodating the under-banked and the unbanked, especially in rural Kenya who primarily depend on SACCOs for financial services.
Speaking at his office when he hosted a visiting delegation of officials and members of Kitwek Sacco Mr Kuria attributed the increasing availability and usage of digital merchant payments to the growing pace of Kenya’s journey towards becoming a cashless economy.
The delegation from Kitwek Sacco, a leading matatu Sacco from Uasin Gishu County is in Nakuru on a benchmarking visit.
The objective of the visit according to the Sacco’s officials is to share and learn best practices on digitization of Sacco operations, such as cashless fare systems, record management, and data-driven decision making as well as explore opportunities for diversification in the matatu sector.
“Leveraging technology as an enabler for the digitization of services in SACCOs will respond to the current specific consumer needs and grow productivity and increase member benefits even in the rural areas,” noted the CECM.
Most SACCOs, he explained, that have embraced digital technology could attest to the enhanced productivity and efficiency of service that they enjoy.
According to the Sacco Societies Regulatory Authority (SASRA), Kenya’s more than 22,000 registered SACCOs serve 15 million members and control over Sh1.5 trillion in assets, Sh1 trillion in deposits, a loan book of Sh980 million and holds 30 percent of national savings.
The cooperative movement, mainly Saccos, has been the backbone of Kenya’s economy contributing more than 40 percent to the Gross Domestic Product and is expected to grow in the coming years.
The tremendous expansion has been made possible by the ever-ballooning deposit and non-deposit taking Saccos.
Mr Kuria indicated that internet coverage, connectivity and affordability in Kenya provide a near-perfect infrastructure to facilitate the migration of Saccos from traditional processes to the efficient digital world.
He observed that it was time members were also sensitized and educated on the benefits of a digital system versus the standard system and its prospects.
He added that digital operations would herald the convenience of faster transactions in Saccos, improved services and general members’ satisfaction.
“Optimizing operations will also guarantee security as most core banking platforms provide secure platforms for transactions hence ensuring the protection of member data and finances,” added the CECM.
Mr Kuria said the ever-changing market trends necessitated that Saccos change their modus operandi to tap and retain the dynamic customers by digitizing their operations so as to enable them to get the services conveniently.
He highlighted the positive impact of the County Government’s Wezesha Biashara Fund, noting its affordable interest rates and the vital support it continues to extend to the matatu sector, an industry he pointed out remains a major driver of Nakuru’s economy.
The Chief Officer for Cooperatives, Mr Kibet Kurgat affirmed Nakuru’s commitment to building stronger cooperative societies through collaboration and innovation.
Mr Kurgat noted that the digital revolution will enable a customer in a remote village and small townships to access credit and saving facilities without making a visit to a physical office.
“Digitization provides an avenue for Sacco members to transact and get services instantly at the touch of a button. With services such as account opening, transacting and loan application made easier by digitization, the young generation will be attracted to these products,” noted the Chief Officer.
While emphasizing the vital role SACCOs play in supporting local farmers and agribusinesses and their central role in uplifting farmers and value chain participants throughout the county, Mr Kurgat called on farmers to join cooperatives, stressing that membership would enable them to access a range of resources and services, including financing, which could improve their productivity and resilience.
He pointed out that Saccos in Kenya had grown exponentially due to their ability to provide simple, accessible and reliable financial services to the large unbanked low- and middle-income population adding that Saccos must take the digital leap or risk falling behind the competitive curve.
While emphasizing that they should rethink, reengineer and reimagine their business models to adapt to current realities, Kurgat indicated that digitization had many potential benefits for the stakeholders as digital driven operational efficiency saves costs allowing competitive products and services.
Using cloud computing for instance, he explained that Saccos could eliminate tonnes of paper work from their processes.
With the high prevalence of mobile services and money services, the Chief Officer observed that innovative technology platforms would make Saccos even more attractive to digital-savvy clientele.