Initially the Sacco set up in the cooperative movement brought together members of the community with the common need and could only be set up close to its common bond. They were based on the cooperative values of self-help, self-responsibility, democracy, equality, equity, and solidarity. This was possible since these cooperative were formed by people who knew each other very well.
If it was an employee based Sacco it could only be located within the institution premises. The farmers based Saccos could only be based in a common centre where farmers could channel their farm proceeds to the Sacco. These Saccos could operate within the region where the crop is grown without branches across the country. This made it next to impossible for members outside the region to either join or access the Sacco services.
Those ethnic Saccos that started as a farmers’ group in a particular town today have grown in membership and revenues over the years. Some of the members have moved to other parts of the country for their own reasons. Most Saccos have opened the bond and nowadays finds the need to move to other parts of the country to expand their market and control as well.
Saccos are making new steps and sprouting new shoots day by day and expanding in every dimension. They have grown financially, numerically thus wanting to cover wide geographical area. Some members have either relocated, transferred to various parts of the country. Some Saccos want to reach to the relocated members while others want to expand their businesses as the initial common bond companies holding their membership are also expanding and opening new offices in all parts of the countries which is a good initiative.
Sacco are therefore considering to open new branches in other parts of the countries to serve a number of reasons that includes a bid to expand their branch network by taking services close to the people and offering convenience service.
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They also do so with an intension to boost their physical presence to enable them increase membership and account activation especially dormant accounts occasioned by relocation of members from original location of joining.
With all the digitalisation of services there is a class of Kenyans who still rely on traditional banking for transaction and the Sacco could choose to take care of them.
Some Saccos are influenced to fit in the global market in order to survive the high competition from other financial institutions offering similar products and services. They are therefore required to ensure they increase revenues through mobilizing transactions and this can only be achieved through increased membership as well as covering a large physical location.
There has been an emerging need of providing access to credit services to the unbanked populations taking advantage and capitalizing in places other financial institutions have abandoned. The aggressiveness of the Sacco industry to be felt on the ground is just the new normal in the cooperative movement.
To some extent it is a measure of growth due to increased popularity created by this initiative within our country.
However, the true meaning of Sacco business model should not be lost. There should be a distinction of the Sacco and the competitors in the same credit and savings industry. Saccos should always keep in mind that they are an autonomous association of persons united voluntarily to meet their common economic, social and cultural needs and aspirations founded on the seven principles guiding the cooperatives around the world that included.
- Open and Voluntary Membership
- Democratic Member Control
- Members’ Economic Participation
- Autonomy and Independence
- Education, Training, and Information
- Cooperation Among Cooperatives
- Concern for Community
This calls for all saccos to be member centered and all operations and decisions made should always benefit the members.
As a matter of fact, additional branches come with both advantages and disadvantages. It is the responsibility of the Sacco to evaluate themselves whether they are stable enough to bear the risk accompanied to the risks.
The members control the Saccos democratically and they should always ensure they are being served and reached effectively and if they are not ready to face the new challenges attached to the new branches the management should always come up with other efficient ways to serve them.
The Saccos management have a responsibility to ensure that the Saccos are ran as per their budgets and the same ought to have been approved and passed by their members in a properly constituted Annual General Meeting.
In all circumstances the Saccos should stick to their core businesses of taking members deposits and lending which should be the leading priority. Saccos should be sober enough before undertaking such decisions or of such a huge effect on their members. The relevant feasibility studies must be made and the members informed and educated Sevellary about them before establishment of these branches and satellites.
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The initiative should be controlled and maintained as per the Saccos capabilities and member preferences. The cooperative movement and the regulator should help the Saccos nurture the existing Branches and Satellite Offices to ensure they build strong institutions and avoid establishing several weak points that may not last for long time.
It would be advisable to Saccos to embrace the new technologies that minimise on every cost that minimize on returns to its members.
Saccos through their affiliate partners should embrace investing in research on mobilizing more savings and deposits and part of their core business.
The Saccos are intended to offer lending at cheaper rates and to declare rising dividends rates at the end of each year so that the members can continue to invest in them.
The members will always be attracted and have confidence in a Sacco that meets their need every time they need their product and services.
Compliance with the set guidelines by the authority is key to establishing strong and stable long lasting institutions.
By Dorcas Nyambura Ndegwa
dornamvua@gmail.com
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