2 minute read
Digitizing Saccos is Currently Inevitable but Must Begin with Management
By Malachi Motano
The disruption witnessed by Savings and Credit Cooperatives (SACCOS) in the current digital age is calling for urgent automation.
Advertisement
However, the exercise must begin with the leadership, since it is through their participation, that will promptly transmogrify and advance the tempo, of the current unavoidable digitization of the financial institutions, such as Saccos.
Leadership here, refers to stakeholders of the deposittaking Saccos, participation of policymakers, industry regulator, Saccos’ management, from the CEOs, Chief Finance Officers to Heads of IT.
From the recent 2020 premier virtual East Africa SaccoTech Forum, that was organized by CIO East Africa, it came out clearly that leaders in the Sacco movement should urgently embark on the journey of digital transformation, for them to have impact on social development.
According to Kenya Union of Savings and Credit Co-operatives (KUSCCO) Managing Director George Ototo, digital leadership embraces the increasing use of digital technologies in the world of business, as well as how organisations or institutions, are nurturing opportunities and tackling risks in a fast-developing, technology market environment.
The Sacco stakeholders ought to reflect on the various past unbelievable technological developments and the adjustments that are indicating that Saccos, are walking step by step, on a journey lined to modify processes, that will revamp social impacts in the overall goal, of the co-operators involvement in
building the economy.
Now that Saccos must purpose to be dynamic in the future, emphasis must be placed on the need for the leadership, to forget the already disrupted way of management and instead lead their institutions with a focus on adaptability, agility and transparency in this era of digital transformation.
The future is dynamic which calls for reorganisation, fast adaptation and will have no space for traditional management. Previously most organizations were focused on efficiency and effectiveness. Saccos in the country have come up with various strategic plans, to improve their performance within different periods.
Some of these plans intend to make Saccos achieve competitive advantage, in the current turbulent business environment; like customer relationship management, education and training, information technology, regulatory framework, monitoring, evaluation and mentorship and capacity building in the cooperative movement. In Kenya and even the rest of Sub-Saharan Africa, Saccos are today highly winning the confidence of savers, compared to traditional banks due to their easy loaning nature.
As a result, Saccos have attracted large membership. In Kenya, there are over 14,000 registered Co-operative societies, of which 5,000 are Saccos. The neighboring Uganda, has more than 6,000 Saccos operating and serving more than 18 million people, while in Ethiopia there are over 20,000 financial institutions. Despite servicing such large numbers, its so unfortunate that some of the Saccos still use rudimentary paper-based tools, to manage their daily data and processes, such as recording members’ profiles, savings and loans information, sales of inputs and purchases of outputs.
The old system has high costs implications for Saccos, including loss of time on administrative issues and looking for documents, employing large numbers of staff to handle manual recording, lack of reliable data for planning and
CONTINUE ON PAGE 43
