By Sammy Chivanga
Savings and Credit Co-operative Societies (Saccos) are increasingly turning to marketing executives to recruit and retain new members as dormant members rise.
This is a new trend in the Sacco movement that has traditionally been depending heavily on existing members to market their organizations.
Members have been receiving back up from a few full-time marketing executives whose main role was to explain to potential members the products offered to members.
However, many Saccos are now changing tact by hiring more marketing executives on commission to primarily bring in new members.
Acting Commissioner of Cooperatives Geoffrey Njang’ombe acknowledged the trend saying that it carries a lot of hope for growth in the cooperatives movement going forward.
“If the strategy to use marketing executives is well done and not used as a reap-off, it will give good results. It can even be cost-effective when executed on commission basis meaning you only bring them on board as and when you need them,” said Njang’ombe.
“This depends on the kind of products you have. For instance, marketing would do wonders for Cooperatives deeply in real estate.”
This mirrors the approach that is used by other financial sector players such as banks, microfinance institutions and insurance firms.
The new model comes on the back of a record rise in dormant members and deposits have grown at the slowest pace in over 12 years.
Economic Survey 2020 shows that deposits, in Saccos with Front Office Service Activity (FOSA), grew at 11.3 per cent to Sh381.1 billion last year from Sh342.3 billion in the previous year.
The growth in deposits achieved in this period is the slowest since 2007 when Sacco Societies Regulatory Authority (Sasra) started sharing performance indicators for the sector. Dormant members in Saccos rose by 40.1 per cent to 676,052 in 2018.
Unaitas CEO Martin Muhoho said that Saccos have realized that sitting in the office and waiting for new members to come is not working.
“The traditional way of doing Sacco business was through referral by members but this has proved not to be sustainable because you also need to blow your own trumpet,” said Muhoho.
“That is why the trend is shifting to having your executives who can go to where people are and make sales. For a long time, Saccos were sitting in offices and waiting for people to come but this is not sustainable.”
Unaitas has been strengthening its sales division and now has a full department for marketing. It has started collecting members’ deposits at their places of work as opposed to the members visiting branches.
Growth in the number of active members is seen as the only sure way for Saccos to mobilise deposits—the key source of loans to members.
Mombasa Port Sacco is, for instance, recruiting marketing executives on one-year contract renewable for a further two years based on performance, to serve in Mombasa and Nairobi offices.
The Sacco said that the marketing executives will be reporting to the business development manager and their main roles will be recruiting new members as per set targets and selling Sacco products.
The executives will also be used in tracking loan repayment and collections, ensuring existing members are retained as well as passing Sacco information to customers on any new products or policies.
Solar Rays Energy Sacco, a medium-sized Cooperative, in July also advertised for positions of field executives as it seeks to win new members. The field executives will work in their preferred region in Muranga County and will be responsible for educating members on our product portfolio.
Nyati Sacco in January recruited sales representatives with the main role being to identify business opportunities by seeking quality prospects and converting them into members.
Boresha Sacco, Ukulima Sacco and Stima have all in the recent past also strengthened their marketing teams.
Moses Chebor, the CEO of Boresha Sacco, said competition with other financial service providers such as microfinance and banks has become very stiff, informing the shift.
“There is a lot of competition and it is coming in the form of other financial service providers crisscrossing estates to recruit members. If Sacco members can’t see us, they may think we do not exist,” said Chebor.
He added that the normal way of recruiting members has shifted due to technology, for instance, the downloading of pay-slips when recruiting members or signing forms for loans to give consent.
“It is about personalised services so that members can understand procedures. It may look expensive now but returns will come later,” said Chebor.
Stima Sacco has been recruiting sales relationship representatives with the same aim of strengthening the sale of its products to new and existing members.
Ukulima Sacco last year hired branch marketing officers to recruit new members to the Sacco and also coach sales representatives on how to market Sacco products.
The shift in member recruitment model is not just happening among small and mid-level Saccos. Giant Saccos are also turning to this model to increase membership.
Mwalimu National Sacco has in the recent past recruited direct marketers, reporting directly to the marketing and corporate affairs manager.