February 8, 2023

Sacco Review|The Leading Newspaper for Co-operative Movement in Kenya

The Leading Newspaper for Co-operative Movement in Kenya

The hits and misses in Sacco rebranding frenzy

Fred Sitati, Co-operative Movement Consultant.


By Fred Sitati

The liberalization of the  Cooperative Sector vide Sessional Paper No 6 of 1997 titled Cooperatives in a Liberalized Economic Environment  gave Saccos a chance to rebrand to grow and enhance their competitiveness in the liberalized market.

They rebranded by developing strategic plans that prioritize short and long term measures of achieving intended goals. As a result of this, most Saccos’ missions read ‘to be the best Sacco in the country’

What did the Saccos do to rebrand?

i) Changed names.

New names were adopted to endear the Saccos to broader catchment areas beyond the traditional common bonds captured in their bylaws. The Saccos hoped such changes could boost their brands in the hitherto controlled environment. 

ii) Saccos amended the common bonds and areas of operations in their bylaws. As a result of this, membership grew exponentially that   the ‘new members’ outstripped the ‘traditional members’.

iii) In a bid to attract more members, the Saccos developed very attractive short term loan products to keep commercial banks at bay. The high uptake of short term loans progressively eroded the demand for development loans culminating in members becoming net borrowers rather than net savers. This was an affront to the primary objective of forming Saccos: inculcating a savings culture and providing affordable loans to the members.

iv) Saccos developed new logos, chose colours of staff attire, modernized their office premises and also hired qualified staff to manage the anticipated increased workload.

What are the hits of rebranding?

  1. By and large, all Saccos that rebranded have witnessed exponential growth  in business
  2. The expansion of branches has improved service delivery and created employment opportunities for many Kenyans
  3. Due to the stiff competition amongst the Saccos, to a large extent efficiency has been achieved.
  4. The corporate images of these Saccos have  been boosted through engagement of qualified Secretariat staff led by Chief Executive Officers (CEOs)

What are the misses of rebranding?

  1. Since membership is some Saccos is now ‘open’, the Saccos risk losing their identity. Some new Sacco names are not easily related to the original names the public were acquainted to
  2. As competition among Saccos widened, rates of dividends and interest on deposits became the major determinants of  luring new members to join or defect to  Saccos perceived to be better in service delivery. Such rates also determine the re-electability of the retiring board members. Your guess is as good as line as to whether or not the trend is in line with the cooperative identity.
  3. Due to the stiff competition among Saccos, some employed unorthodox means like monetary inducements to get new members.
  4. In terms of governance, the huge membership dictated the adoption of delegates system. The delegates attend Sacco meetings, a move that has disenfranchised majority of members.
  5. Due to the diversity in membership, it became challenging in terms of logistics to organize successful members’ education meetings. As a result of this, some Saccos organize delegates’ education programmes purportedly on behalf of ordinary members who are treated as mere customers.
  6. Financial implications of rebranding in some Saccos was shrouded in opaqueness and some of the anticipated achievements were, to say the least, hot air!

Sitati is a respected consultant within the Co-operative Movement.