The latest released Sacco Societies Regulatory Authority (SASRA) report reveals a significant surge in competition between Savings and Credit Cooperative Societies (SACCOs) and commercial banks in Kenya, with consumers opting for SACCOs.
The craze for SACCOs is because they offer low-interest loans and attractive dividend payouts, making them an appealing choice.
Furthermore, SACCOs’ member centric approach, how they prioritize members’ interests and foster trust and loyalty drives their popularity.
In 2010, Kenya introduced agency banking, which SASRA highlighted as an alternative to brick-and-mortar branches. The success story has inspired SACCOs to adopt this approach by actively recruiting over 3,000 agents.
This action deepens deposits and reduce operational costs associated with the establishment of physical branches making them strong contenders in the competition with commercial banks.
Their convenient accessibility through agent networks and cost-effective operations resonates with consumers seeking affordability.
In essence, the competition encourages SACCOs and commercial banks to continuously strive for excellence which can lead to improved services, and potentially result in driving innovation, improved service quality, better financial products and interest rates for consumers.
By Thuita Jaswant
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