The Cooperative Commissioner, David Obonyo, has expressed his concern about the infiltration of Sacco systems by hackers, which exposes their financial transactions and accounts to criminal elements. According to reports, poor governance and security structures have caused some Saccos to face cyber-related crimes. This problem is more pronounced in Saccos that are financially struggling and those that are facing leadership wrangles.
To address these challenges, Mr. Obonyo suggested that board subcommittees should advise directors on strategies to mitigate emerging threats to Sacco operations. Sacco leaders in the country are also working to establish shared platforms that will offer members a third payment system similar to that provided by banks and non-cash payment systems, such as Automated Teller Machines (ATMs) and credit cards. The shared platform will include a shared fund management platform that supports inter-Sacco lending and cross-Sacco funds transfer.
Mr. Obonyo stressed the importance of strong governance structures, such as audit and supervisory committees, to enhance checks and balances on Sacco operations. He also urged directors to stay ahead of hackers by keeping tabs on emerging technological trends.
The Cooperative Alliance of Kenya (CAK) vice chairman, David Mategwa, echoed Mr Obonyo’s concerns about cybercrime and poor governance. He noted that several Saccos lack robust technology infrastructure, such as firewalls, which exposes their financial transactions and accounts to criminal elements.
To address these challenges, Saccos, with the support of CAK and Cooperative Bank, launched the Co-op Tech platform. This platform helps credit unions expand their market reach, save cash, and hook up to the National Payment Systems. The utility, established in March last year, is designed to cushion credit unions that are struggling to install the latest Information Communication Technology (ICT) tools to deepen productivity by sharing.
Other Saccos have established the Kenya Saccos Central Liquidity and Shared Services Cooperative Society Limited, which will be regulated by the Saccos Society Regulatory Authorities (SASRA).
Mr. Mategwa emphasized the need for directors and managers to be trained and exposed to opportunities to enable them to confront the risks facing Saccos. He also noted that the Sacco subsector has registered tremendous growth; thus, there is a need for the establishment of several shared platforms similar to credit unions in the USA.
