Saccos have moved into a second wave of rebranding, in an apparently new order that is adding the words DT Saccos (Deposit Taking-Saccos) on their names.
What is the rationale of this craze? How does this change of identity impact in the industry? Is it a way of DT Saccos delinking with other societies such as those in the matatu business?
Sacco Review Newspaper went out to get the story from players in the sector.
Among the respondents was Symon Mburia is who is currently acting as the Chief Executive Officer at Kenya Society of Professional Co-operators (KSPC).
He said the trend was informed by the need to depict those SACCOs as better regulated, mature in terms of experience, better capitalised and secure for members’ investments
He said Saccos that are regulated by the Sacco Societies Regulatory Authority (SASRA) are adding the phrase “Deposit Taking” on their names.
“It is important to note that this class of Saccos are slightly less than 200 out of more than 5000 Saccos registered nationally. Therefore there is need to create an identity,” said Mburia.
He said the change of identity has made a big impact on the industry because the financial sector has many players which include commercial banks, mortgage companies, microfinance institutions, Savings and Credit Cooperatives, insurance companies amongst others.
With each player in the sector having its area of focus or specialization, developing business trends blurs the difference between them in terms of product offers.
“The change of identity for Saccos put them at par if not ahead of other players in the banking sub – sector. However caution must be taken as Sacco’s position them for better visibility,” he added.
He said adding DT on the new name also is also a way of differentiating themselves from one another.
Deposit Taking insinuates that category of SACCOs have a banking facility known as FOSA (Front Office Service Activity) while the rest do not have such a facility.
“Fosa or deposit taking Saccos are able to offer a wider range of services than the other category of Saccos and the best way to communicate this to the public is to have the name ‘Deposit Taking’ for self-advertising,” said Mburia.
He said the brand DT is also a way of delinking with other societies like those in the Matatu industry, which is known for negative things that other financial service providers may not want to be associated with.
More reforms are however expected in the transport sector to position the Matatu Saccos as we know them today to Transport Co-operatives.
“There is a lot of improvement in the transport sector since the requirement by government to have matatu operators either registered as Saccos or companies took effect,” said Mburia.
Financial sector players include the commercial bank, mortgage companies, the microfinance institutions, the Savings and Credit Cooperatives and insurance companies among others.
Each player in the sector has its area of focus or specialization though developing business trends blurs the difference between them in terms of product offers.
The change of identity for SACCOs put them at par if not ahead of other players in the banking sub – sector.
However caution must be taken as Saccos position themselves for better visibility and competitiveness, so that they do not lose their co-operative identity as defined through the co-operative principles and values.
Saccos should also avoid to be drawn by competition to gun for super profits but instead strive to maximise member welfare by offering best services at a cost.
The demand for high profits and declaration of high interest on deposits and dividend on share capital is just attracting investors and pushing out deserving co-operators through unaffordable services.
Saccos are able to register growth by rebranding and using names that give a national identity and Deposit Taking makes them appeal to any consumer who is seeking financial services.
Kenya Union of Savings and Credit Co-operatives (KUSCCO) Managing Director George Ototo, added that Saccos that have rebranded have seen an increase in membership.
“As a result of this rebranding they are expanding their brand network. It gives them a national appeal and they are able to grow regionally,” he said.
Licensed Saccos have launched recruitment drives and share promotions, since SASRA introduced regulations that require all Deposit- Taking Saccos to have a core capital of not less than Sh10 million.
Saccos have traditionally focused on customers in rural areas but have now gone full blast focusing on getting more in urban areas to drive their growth.
By Our Reporter
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