The savings and credit cooperative societies have made significant progress in money lending since their inception. They have been providing savings and credit services to their members, making remarkable progress in the informal finance market.
SACCOs have been highly popular amongst the people such as farmers, small business owners, women and the younger generation. They provide loan facilities without demanding much security. For instance, a member’s share with a guarantee by another member is considered adequate security for a loan. The amount of paperwork required to avail of loans is low.
However, the financial requirements are constantly changing, resulting in a transformation in informal finance. Today, people require their cooperative society to understand their financial needs and deliver accordingly.
They require SACCOs to offer a wider range of financial products and services that meet their needs. They also want these loans to be sanctioned quickly and without much paperwork.
Moreover, the demand for bigger loans is expected to rise as business owners and entrepreneurs look to revive their businesses in the post-pandemic world.
How can digitization help?
Digitization can play a critical role in enabling finance for the people in Africa. With the help of technology, SACCOs can provide services quickly and securely to their members, meeting their changing financial needs.
Loan application processing time
The loan application processing is generally human-intensive and time-consuming. On average, it takes around one or two weeks to process a loan application, down from two months a few years back. Technology can help SACCOs reduce the loan processing time to a few days or even hours.
As every information related to the member will be available online, the credit check and background check will become easy. SACCOs will also be able to transfer the loan amount directly to the mobile wallet instead of giving a cheque which will add a significant amount of time.
Financial products offered
With the help of technology, SACCOs will be able to gather and process a huge amount of user data. The user data can help them understand their member requirements in a better way. This deeper understanding can lead SACCOs to design their products and services to better meet their requirements.
Technology and digital systems can help SACCOs serve their members in a quick and efficient way. With a digital system in place, it will be easier to process loan requests, update transaction records, and sort grievances. All this can lead to a pleasant user experience while SACCOs can focus on improving services to achieve more growth.
Wakandi to promote digitization in Africa
As a technology-driven company, we aim to help informal financial groups embrace technology. Our solution will be an initiative in Africa to help SACCOs and microfinance institutions offer digital financial services to their members. With Wakandi, members will be able to use mobile money accounts to deposit contributions, apply for loans, get the amount directly to their wallets, and manage their finances online.
Wakandi can also help perform various admin-related tasks to make SACCOs management smoother and more secure. With our system in place, they will have more time to strategize better and progress to achieve their future goals.