The resurgence of digital lenders is giving Saccos a headstart as it poses a significant challenge to attract and retain the younger generations; Millennials and Generation Z.
It is particularly made more difficult by their overall predisposition since many of them still operate in a traditional manual style at their physical branches.
A 2022 SASRA report on the impact of the formalization, supervision and regulation of alternative digital credit providers by Central Bank of Kenya (CBK) is a cause for worry for non-digitized Saccos.
This development has introduced an additional layer of competition for regulated Saccos in the fiercely competitive digital credit provision market.
Surprisingly, the digital lenders have managed to gain a remarkable level of acceptance and trust, surpassing the perception they had before.
In order to retain their existing customers and appeal to the younger generation, Saccos must adapt and provide efficient services. Furthermore, they must devise innovative strategies to attract the majority of the population.
Nevertheless, the report highlights that a majority of regulated Saccos have already ventured into the digital credit provision space. They have embraced various platforms such as mobile money, online platforms, internet platforms, ATMs, and Sacco agencies.
The proactive approach demonstrates their willingness to evolve and stay relevant in the ever-changing financial landscape.
The Cabinet Secretary (CS) for Cooperatives and MSMEs Development Simon Chelugui has been at the forefront rallying Saccos in the country to develop strategies that will cater for the preferences of the Generation Z; those born between 1996 and 2010.
According to the CS, this segment of the population is the largest and the most dynamic in the country, constituting 33.44 per cent of the total population.
“It is characterized by its ability to get things done on the go; thriving on the digital ecosystem where efficiency in service delivery and instant access is paramount,” Chelugui said.
Felix Morowe, a Sales and Relationship Officer at Stima Sacco Society Ltd, says attracting younger members to Saccos and credit unions requires leveraging digital and social media platforms.
As a matter of fact, Millennials and Gen Z, who are more digitally connected, prefer engaging with organizations online.
“Younger generations, such as Millennials and Gen Z, are more digitally connected and often prefer engaging with organizations through online platforms. By incorporating these strategies, Saccos and credit unions can effectively leverage digital and social media to attract and retain younger members, ultimately ensuring the long-term sustainability and growth of their organizations,” Morowe said.
Chesang Bii, a Co-op Bank employee, opines that establishing a strong presence on popular social media platforms like Facebook, Instagram, Twitter, LinkedIn and TikTok are the way to go.
He advises Saccos to utilize eye-catching visuals, interactive content and relevant hashtags to increase engagement and reach a wider audience.
“Saccos should take advantage of online platforms to educate young people about the benefits of Saccos. Share informative content, blog posts and videos that explain the cooperative’s mission, financial products and success stories of members,” Bii said.
She added that ensuring Saccos’ websites are mobile-friendly and easy to navigate is a sure step of attracting young people.
“Consider developing a mobile app that allows members to access their accounts, apply for loans, and perform transactions conveniently on their smartphones,” she said.
John Karanja, an IT expert for a Sacco based in Nairobi, says for Saccos to grow the population of younger members, they must utilize analytics to understand the behaviour of young people.
According to him, this will enable them to offer personalized product recommendations or targeted promotions.
“Collaborate with influencers or micro-influencers that have a significant following among your target audience,” Karanja said.
He adds that by adopting these approaches, Saccos can successfully allure and involve younger members through digital and social media channels.
“Today, technology has platforms where Saccos and credit unions can effectively harness the power of digital and social media to entice and retain younger members, thereby guaranteeing the long-term viability and expansion of their organizations,” he added.
By Amos Kerich
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