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Why Your SACCO Needs A CIO

When SACCOs were started back in the day, the whole affair of saving and lending was known as a merry-go-round. It meant at least once a year, a SACCO member got to host other members. It created camaraderie, a social aspect to SACCOs where people became friends or friendships were reaffirmed on a mostly sunny Saturday. SACCOs have since evolved into magnificent, powerful beasts that require sophisticated gadgetry. Which is great. Banks can learn a lot from SACCOs, SACCOs partner with fintech and everyone is happy. Sure, the social aspect of a SACCO vanished and moved beyond the common thing that bound its members because we all have enough friends, right?

I would like to think it is the social aspect of a SACCO that eventually became their personal touch with members, designing a customer experience that felt personal even though there were just to many people to know everyone’s names. While SACCOs can sometimes feel unsteady in their leadership, the bigger they get, the more structure they need, and the more important tech becomes as a tool and an ally. Technology can help SACCOs operate more efficiently, provide better service to their members. By embracing technology as a friend, SACCOs can stay competitive and meet the changing needs of their members in a rapidly evolving digital landscape. With the emergence of new technologies, such as mobile banking, digital payments, and blockchain, it is very possible SACCOs may lack the resources or expertise to adopt these new technologies.

The one thing about SACCOs that banks and even fintech can’t touch as a result, is financial inclusion. Reached the underserved and unbanked nooks and crannies. Not only do SACCOs deliver access to affordable credit: they also encouraging a saving culture, which, is a whole other conversation. SACCOs often offer microfinance services, which provide small loans to individuals or groups that may not qualify for traditional bank loans. This can help promote entrepreneurship and economic growth in underserved communities.

Mobile banking and digital payment solutions can also help reduce the costs and barriers associated with accessing financial services, because there is a sense of ownership from, and by, the members. SACCOs are based on cooperative principles, which highlight democratic control, member participation, and social responsibility. It places them on the path of a social mission; and because they are community-based, they will be concerned over the well-being of their members.

However, SACCOs need to accelerate their digital transformation so that all these amazing things can find their way into the lives of underserved. Automation, data analytics, cybersecurity, cloud and core banking would serve any SACCO well without having to break the bank. SACCOs may struggle to achieve financial sustainability as well thanks to insufficient capital, high operating costs, low loan repayment rates, and insufficient revenue generation. It is why SACCOs are getting into investing.

The possibilities of a SACCO can be wrung out by the fabric of technology, sharpening it into a precise instrument that members can direct, aim, and shoot. It is why a CIO can be a partner to walk with a SACCO.

ARTICLE by CAROL ODERO