The role of cooperative societies in Kenya has been extensive and impressive. They range from agricultural and livestock cooperatives in rural areas to savings and credit cooperatives (SACCOS) in urban areas. They perform as an active organization to provide financial services, especially to the unbanked.
The majority of people, especially in rural areas, connect with SACCOS to access financial services. However, with the changing financial sector, user needs are constantly changing too. This drives SACCOS to respond to the rising market needs. Focussing on certain aspects, SACCOS can achieve better growth and enhance the user experience. We have tried to identify some factors that influence their performance.
Factors affecting SACCOS performance
- Management – Management of services and funds can be a key indicator of the performance of SACCOS. If SACCOS can effectively manage the savings of their members and provide timely and affordable loans, they can be considered as better-performing cooperative societies.
- Flexibility – SACCOS are expected to be flexible while offering financial services to members. As per various surveys online, SACCOS tend to offer services quickly without needing much paperwork and long processes. This ensures that the members are getting services effectively and efficiently. Better flexibility may lead to better performance for SACCOS.
- Innovation – As the financial sector continues to evolve, innovation has become a necessity for all businesses, including financial institutions. Right innovation can help SACCOS boost their performance and offer better services to their members. It can also lead to cost savings, reduction in turnaround time and improved delivery of services. Read to know how innovation can help solve various challenges for financial institutions.
- Policies and compliance – Various laws and regulations implemented by the Kenyan government can impact the performance of SACCOS. They need to comply with these laws to be able to operate in a proper way. This may impact the performance of SACCOS to become compliant.
How technology can help
The above mentioned are some of the many factors that impact the performance of SACCOS. These factors can lay a positive or negative impact on how SACCOS operate. Technology can play a crucial role in enabling SACCOS to perform better and enhance user experience. A survey was conducted in Nairobi in 2014 focusing on the effect of Information and Communication Technology (ICT) adoption on SACCOS. The survey showed the adoption of ICT can help SACCOS improve financial performance.
Technology can help SACCOS innovate and meet the changing needs of users. They can improve how they work, bringing remarkable benefits to various tasks such as management of services, record keeping and more. It can open avenues for increased financial inclusion in Kenya by connecting people with mobile wallets.
Moreover, it can bring the flexibility of adding or removing members, providing instant services, and adapting to the changing market needs.
At Wakandi, we aim to bring technology to the Kenyan informal sector and strengthen SACCOS with digital capabilities. We believe technology can help us build a cashless society for people and make them ready for the future.