SACCOS in Kenya have always been considered as a mechanism to promote savings and credit services. They have contributed immensely towards the socio-economic development of farmers, workers, and small and medium enterprises.
SACCOS bring stability to communities and it is impossible to overlook how workers benefit from their existence. There are 22,000 SACCOS in Kenya with over fourteen million members (2017). Many of them have flourished from as low as fifteen members to more than 90,000 members, transacting billions of Kenyan Shillings.
They have shown resilience and strength in surviving the pandemic. Eventually, they intend to grow at an even faster rate in the coming years. Let us have a detailed look at various aspects that impact what the future holds for SACCOS in Kenya.
Vision 2030 Kenya
The Vision 2030 Kenya recognizes co-operative societies such as SACCOS as a vital player to mobilize finances. They promise to deepen financial access and meet the credit needs of individuals and enterprises in the future. Various industries that SACCOS can strengthen are finance, education, agriculture, housing, small-scale development.
SACCOS in Kenya are also implementing an inter-SACCOS lending market. They will eventually integrate into the National Payments and Clearing system.
According to the East African news, Sacco Societies Regulatory Authority (SASRA) is working with a multi-agency team comprising, Central Bank of Kenya (CBK) and the Kenya Law Reform Commission (KLRC), to draft the legal framework through which SACCOS can lend and borrow money from each other.
Under this system, SACCOS will be able to lend and borrow directly from each other to offset their financial positions. It will enable them to manage cash constraints in the future arising due to regulatory changes in the market. According to the article, 50 SACCOS have shown interest to take part in the initiative and are working together with SASRA.
With all the initiatives and governmental support, technology is bound to play a crucial role for SACCOS in the next few years. SACCOS will explore new technologies and digital systems at a faster rate as the financial needs grow.
Technology can help them improve transparency, accountability and reporting. It will place SACCOS in a better position to receive financing from banks and financial institutions.
Implementing digital systems like CAMS can help SACCOS digitize operations and gain a competitive edge in the future. If done properly, it will increase productivity and operational efficiency through reduced costs, and user satisfaction.
With increased digitization, SACCOS can also enjoy the agility to quickly comply with regulations. That said, digitization will play a significant role in helping SACCOS become more compliant.
We believe that SACCOS will continue to play a big role in enabling financial services for millions. They will be more formalized and digitally advanced as new regulations and changing demands impact their work.
They need to focus on user satisfaction and continuous improvement to be able to sustain the ever-changing environment. This way, they can achieve better growth and be ready for the future.