According to a report submitted by Accenture to the Financial Sector Deepening (FSD) Kenya, Saccos are one of the leading sources of finance, and in many rural areas, local Saccos are the only provider of financial services.
Fintechs are becoming invaluable partners for Saccos in Kenya who provide innovative digital solutions to streamline their operations through digital banking, blockchain technology, mobile-based services, and cloud-based core banking systems made specifically for Saccos.
They are empowering Saccos to move away from the traditional manual processes and do away with tiresome spreadsheets, towering paperwork and manual errors.
In place of those, are now automated tasks such as member onboarding, loan processing and account management. This transformation eliminates human errors and accelerates service delivery, resulting in increased operational efficiency within the Saccos.
We also have Mobile and Online Banking. With this, members or individuals seeking Sacco membership do not always have to visit branches to acquire physical services. They can check balances, make deposits and initiate loan applications through mobile apps or web portals. This empowers members to access their accounts and perform transactions anytime, anywhere.
Another one is digital payments and transfers; platforms that enable Saccos to have their own banking systems. By integrating with payment gateways, Saccos can offer their members various electronic payment systems, such as mobile money transfers or card payments.
These digital payment channels eliminate the need for cash transactions, thus reducing the risk of physical theft. Moreover, with their own banking systems, Saccos will quickly and efficiently process various financial processes that would otherwise have taken longer with third-party banking systems.
Another benefit of Fintech is data analytics and insights. Fintech platforms provide Saccos with advanced data analytics tools that offer valuable insights into their operations quickly and accurately. Fintech platforms utilize machine learning algorithms and artificial intelligence built for specific tasks such as data collection and analysis.
Examples of companies offering Fintech solutions to the Sacco sector in Kenya include Kwara, Wakandi, and M-Tawi.
The use of Fintech for financial transactions is strong in the economy, especially with the success of mobile money. A 2022 SASRA report shows that 209 regulated Saccos have adopted the use of USSD codes, while 109 have chosen internet-based financial services as alternative channels.
According to Financial Expert Cliff Mutai, Saccos today have developed mobile banking apps and services that allow members to access their accounts and perform transactions on the go.
The Kisumu-based expert says digital technology helps Saccos to improve efficiency by automating manual tasks and streamlining processes; a perfect way to free up staff to focus on more strategic and customer-centric activities.
“The technology helps Saccos to enhance their customer service by providing members with 24/7 access to their accounts and services, which in a way can also foster a better understanding of the needs of members,” he added.
By Amos Kerich
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