Why AI Matters for Cooperatives

The Future of Cooperatives: Leveraging Technology and AI for Growth

Cooperatives have long been a cornerstone of economic resilience, built on principles of shared ownership, democratic governance, and mutual benefit. As the world rapidly shifts towards digitalization, it is imperative that cooperatives embrace technology and artificial intelligence (AI) to remain competitive, efficient, and sustainable.

Why Technology and AI Matter for Cooperatives

Traditionally, cooperatives have thrived on trust, community participation, and collective effort. However, in today’s increasingly digital economy, these strengths must be augmented with data-driven decision-making, automation, and intelligent insights. Technology and AI can help cooperatives improve operational efficiency, enhance member engagement, and drive financial inclusion.

For instance, AI-powered analytics can provide cooperatives with a deeper understanding of their members’ needs, allowing them to tailor products and services accordingly. Digital platforms enable real-time interactions, fostering transparency and collaboration among stakeholders. Moreover, AI-driven risk assessment tools can facilitate better decision-making in lending and credit management, a crucial function for many cooperatives.

Transforming Lending Through AI

One of the most significant areas where AI is making an impact is cooperative lending. Access to credit is a vital enabler for economic growth, particularly for underserved communities. However, traditional lending processes often rely on outdated credit scoring models that exclude many potential borrowers.

At Pathways Technologies, we are developing AI-driven credit scoring models that assess borrowers based on alternative data, such as transaction history, mobile payments, and behavioral patterns. By leveraging AI and machine learning, cooperatives can expand financial inclusion, ensuring that more members—especially small businesses and entrepreneurs—can access credit. Additionally, automated loan processing reduces paperwork, speeds up approvals, and enhances overall efficiency.

Skilling the Workforce for the Digital Age

For cooperatives to fully harness the benefits of technology, skilling and upskilling their workforce is essential. Digital literacy and AI proficiency are no longer optional but necessary skills for members and employees to thrive in a technology-driven economy.

Pathways Technologies has been at the forefront of developing digital training programs tailored for cooperative societies. Our programs focus on equipping members with skills in data analytics, AI, and digital financial management. By building a digitally capable workforce, cooperatives can maximize productivity, improve decision-making, and create new opportunities for growth.

Steps for Cooperatives to Begin Their Technology and AI Journey

Embracing AI and technology may seem daunting, but cooperatives can take incremental steps to ease into digital transformation. Here are some key steps to get started:

1. Assess Digital Readiness – Conduct an internal evaluation to understand the current level of technology adoption and identify gaps that need to be addressed.
2. Develop a Digital Strategy – Define clear objectives for technology adoption, aligning them with cooperative principles and member needs.
3. Invest in Digital Infrastructure – Upgrade digital systems, adopt cloud-based platforms, and integrate AI-powered analytics to streamline operations.
4. Train and Upskill Members and Employees – Implement continuous learning programs to equip staff and members with essential digital and AI skills.
5. Leverage Partnerships – Collaborate with technology partners, fintech companies, and educational institutions to gain access to cutting-edge solutions and expertise.
6. Start Small and Scale Gradually – Begin with pilot projects, such as AI-driven lending or automated financial reporting, and expand as confidence and capacity grow.
7. Ensure Data Security and Compliance – Establish data protection policies to safeguard member information and comply with relevant regulations.

Embracing the Future

The integration of AI and technology in cooperatives is not just about modernization; it is about survival and competitiveness. As the cooperative movement continues to evolve, those that embrace digital transformation will be better positioned to meet their members’ needs, enhance financial stability, and drive long-term impact.

At Pathways Technologies, we are committed to partnering with cooperatives to build a future where technology and AI empower communities, strengthen cooperative values, and foster inclusive economic growth. By leveraging digital innovation, cooperatives can not only preserve their core principles but also adapt to a rapidly changing world, ensuring their continued relevance and success.

The future of cooperatives is digital, and the time to act is now.

The author Mr Joel Onditi, President and CEO, Pathways Technologies, has over 15 years’ experience delivering innovative technology and digital transformation solutions in Fintech, Manufacturing, Retail, E-commerce, Government and Not-For-Profit sectors. He has also been a contractor for the US government over the last 7 years, where his assignments include advising on emerging technology projects including open banking, data privacy and protection, as well as cloud use for government.