Regulated Savings and Credit Cooperative Societies(SACCOs) have turned to technology and other delivery channels to match fierce competition in the financial sector for deposits.
Saccos are also using technology to make up for their inaccessibility to the National Payment System Infrastructure, a platform that is already enjoyed by commercial banks, the biggest competitor for Saccos.
Saccos have made use of elaborate partnerships with Fintechs as well as commercial banks, in order to enhance efficient service delivery to their members.
According to the latest Sacco Supervision Annual Report 2023, Saccos have ventured into the provision of mobile money and digital credit financial services in partnership with Fintechs.
They have also partnered with commercial banks in the provision of ATM credit and debit card services, Pesalink as well as cheque issuance, clearance and settlements.
In addition to using technology, SACCOs are progressively adopting an agency business model to transact SACCO business instead of the often-costly brick-and-mortar physical branches. As of December 2023, 37 DT-SACCOs had deployed 4,038 agents throughout the country.
These SACCO agents transacted on behalf of the Regulated SACCOs a cumulative total of 7.82 million transactions with cumulative volume of KSh 27.73 billion in 2023. The majority of the SACCO agency transactions consisted of cash deposits and withdrawals, according to the 2023 Sacco Supervision Annual Report.
“SASRA expects the trend of deployment of SACCO agents as an alternative to the other modes of financial service delivery based on its lower capital cost outlay and maintenance,” said Peter Njuguna, SASRA’s Chief Executive Officer.
SASRA notes that despite the comparative gains being presented by the use of ICT and SACCO agents in financial service delivery by SACCOs, the regulator remains conscious of the cyber risks and threats associated with these virtual service delivery channels. It is thus constantly calling upon the SACCOs to put in place adequate mitigation measures, prior to, during and after the deployment of such channels.
