- Saccos are exploring technology to widen MSME credit access
- A new approach could change how small businesses qualify for loans
- Government and private sector players are looking at smarter lending models
Kenya’s State Department for Cooperatives is exploring new tech and lending models to help Saccos boost MSME credit access.
PS Patrick Kilemi held talks with Alfred Orora, Managing Partner at Pristine Consulting House Ltd, on ways of scaling access to finance for micro, small and medium enterprises (MSMEs) through the cooperative sector.
Talks centred on a capacity building package and an AI enabled loan management system proposed by Pristine Consulting. Designed to help Saccos assess borrowers using cash flow data, the technology also aims to strengthen risk management, flag early warning signs and improve loan recovery.
This approach could prove significant for small businesses that often struggle to qualify for conventional loans because of limited collateral or formal financial records. Cash flow based lending instead examines the actual movement and performance of a business when assessing its ability to repay.
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The engagement comes as government pushes greater use of technology within the cooperative sector. Kilemi has previously highlighted the role of cooperatives in connecting MSMEs to affordable credit, markets and financial services.
For MSMEs with viable operations but limited collateral, the proposed shift toward cash flow based lending could open doors that were previously closed. At the same time, Saccos gain additional tools to manage credit risk more effectively.
By Khayoyo Ian
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