In recent years, Savings and Credit Cooperative Organizations (Saccos) have become increasingly vital to the financial wellbeing of many Kenyans.
They have allowed individuals, families, and small businesses to access credit, grow their savings, and benefit from cooperative economic models that prioritize mutual success over pure profit.
However, as Saccos continue to evolve and introduce new financial products, a critical question arises: are they still focusing on the needs of their members?
This issue matters because saccos, unlike traditional banks, were originally established to prioritize member welfare and collective growth. To sustain their core purpose and thrive in a changing financial landscape, it’s crucial for saccos to keep members’ needs at the heart of their operations, even as they innovate with new products.
Understanding the unique role of Saccos
Saccos serve a different purpose than typical banks or microfinance institutions. Where banks may focus on maximizing shareholder returns and driving profit, Saccos were built on cooperative principles that emphasize community support, economic democracy, and inclusivity.
Members are not just customers—they’re part-owners who expect a voice in the organization’s operations and benefits that reflect their contributions. By addressing the specific needs of members and responding to their feedback, Saccos create a sense of community ownership and loyalty that is vital for long-term success.
The benefits of Saccos should not only be in accessing savings or loans, but also in building stronger financial security and achieving collective financial goals.
The risks of product-centric approaches
Many Saccos in Kenya are now striving to compete with commercial banks and fintech companies by offering a wider array of products, from mobile banking solutions to personal and business loans, insurance, and even investment products.
While this product expansion can provide valuable new tools to members, it also risks shifting the Sacco’s focus away from member-centric goals toward a profit-driven model.
This shift can dilute the unique value that Saccos bring to members and might make them resemble traditional banks—institutions that many members turned to Saccos to avoid in the first place.
Focusing on products over members can lead Saccos to miss the nuanced and often diverse needs of their membership. For instance, some members may prioritize flexible, low-interest loans for agricultural investments, while others may want savings plans that help them pay for their children’s education.
If Saccos focus solely on developing high-return products, they may leave behind members with different needs, who could feel disenfranchised or overlooked. In the long run, this undermines the Sacco’s ability to build strong member relationships, reduces trust, and could lead to attrition among members who feel that their unique financial goals are not being met.
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The value of a member-centric approach
Maintaining a member-centric approach in a Sacco means actively engaging with members, understanding their needs, and prioritizing products and services that align with those needs.
This approach can be implemented by regularly conducting member surveys, organizing forums for member feedback, and empowering members to share their perspectives.
By focusing on members’ concerns and desires, Saccos can design products and services that directly address real challenges, such as affordable education loans, home ownership solutions, and accessible insurance.
For example, the agricultural sector in Kenya relies heavily on Saccos to provide financing options tailored to farmers’ seasonal incomes and fluctuating cash flows. Focusing on members’ agricultural needs, a Sacco could design a loan product with flexible repayment schedules that align with harvest cycles.
Such a product would directly address the financial realities of farmers rather than imposing rigid repayment structures that might work in an urban, salaried setting but create hardship for those in agriculture.
A member-focused approach also strengthens the sense of trust and loyalty, which is essential for the cooperative model. When members feel that their Sacco truly understands and cares about their needs, they are more likely to maintain their membership, reinvest their savings, and even refer others to join.
The long-term benefits of high member engagement far outweigh any short-term gains from focusing narrowly on profit-driving products.
Balancing innovation with member needs
Innovation is essential for Saccos to keep up with the changing landscape of financial services in Kenya, especially as digital solutions become more integrated into everyday life.
However, innovation should not be pursued in a way that alienates or overwhelms members. Instead, Saccos should aim for responsible innovation—introducing new products and services that enhance members’ lives rather than complicating their financial situations.
One example of responsible innovation is mobile banking. For many Sacco members, particularly those in rural areas, traveling to a branch to conduct transactions can be time-consuming and costly.
By implementing mobile banking, Saccos make it easier for members to access their accounts, check their balances, and even apply for loans from the comfort of their homes.
However, mobile banking should be introduced with training and support to ensure that all members, especially those who may be less tech-savvy, can use it confidently and effectively.
Additionally, as Saccos consider expanding into products like insurance or investment portfolios, they must carefully assess the financial literacy and risk tolerance of their members.
Providing a range of investment options could be beneficial for members who want to diversify their portfolios, but Saccos should ensure that members fully understand the risks and potential returns associated with these products.
This may involve offering financial literacy workshops or personalized financial counseling sessions that help members make informed decisions.
Empowering members in product development
One powerful way to remain member-focused while developing new products is by actively involving members in the product development process.
Saccos can create advisory committees composed of members from different backgrounds to offer input on product features and benefits. This approach not only ensures that new products align with members’ needs but also reinforces the cooperative spirit that defines Saccos.
For instance, before launching a new savings product aimed at young adults, a Sacco could hold a series of focus groups with younger members to understand their financial aspirations and challenges. Do they want a product that allows for short-term withdrawals, or are they looking for long-term savings options? Do they need incentives to save more, or are they primarily concerned with low fees?
By gathering such insights, the Sacco can design a product that genuinely appeals to this demographic and meets their specific needs.
Therefore, the success of Kenyan Saccos depends on their ability to stay true to their cooperative roots while adapting to the evolving financial landscape.
This means putting members’ needs above a product-centric approach, which will create stronger and more loyal membership, even as they innovate with new financial offerings.
When Saccos prioritize members, they fulfill their purpose as institutions that drive financial inclusion, community development, and shared prosperity.
These societies must remember that they are not just in the business of providing financial products—they are in the business of improving lives.
As long as Saccos remain member-focused, they will continue to serve as a powerful force for positive change in Kenya’s economy, enabling individuals and communities to achieve their financial goals in a way that is inclusive, supportive, and sustainable.
By David Kipkorir
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