Savings and Credit Cooperatives (Saccos) must leverage on technology in order to remain relevant in highly competitive and dynamic financial world.
Sector leadership must innovate and take advantage of the many resources that are available to assist and secure the stability and future of Saccos and build prospects, wealth and impact positively on members.
The pandemic has changed today’s business environment and many organizations, including Saccos, are now facing many threats.
Initially, the key challenge for leaders was assuring competitiveness and profitability for their Saccos in turbulent environments. With Covid-19, never in history has the pace of change in the movement been rapid and turbulent as it is now.
Recent developments such as the pandemic, the slowdown in Kenya’s economy, increasing costs of doing business and technological innovations especially in the IT sector, have posed real challenges for Sacco managers, making it increasingly difficult to succeed in the turbulent environment.
There have been significant debates about the impact of new innovations on economic performance and competitiveness in general, and on productivity, efficiency, and innovation in particular.
The utilization of technology is critical in cooperatives since it has the potential of transforming economic processes into a ‘New Economy,’ generating a sustained increase in economic growth through processes of technological development and innovation.
Hence, at Sacco level, the expectations are of greater efficiency, lower costs, and access to larger and new markets.
ICT advancements, globalization, competition and changing social trends such as heightened customer proactiveness and increased preferences for convenience have caused intense restructuring of most organizations in the financial sector.
Every organization has been trying to keep up with the pace of technological advancement and desire to reap from the benefits that come with it. One of such sectors is the Saccos.
Saccos are autonomous association of persons united voluntarily to meet their common economic, cultural needs and aspirations through a jointly owned and democratically controlled enterprise.
The key idea behind a co-operative society is to pool the scarce resources, eliminate the middlemen and to achieve a common goal or interest. Cooperatives are vehicles for assisting the people to improve their socio-economic wellbeing.
They are institutions that derive their strength and validity from member cooperation and concern for each other.
Saccos are business entities and operate on the basis of demand and supply.
They give credit to members, who in turn are expected to be able to repay within a given period.
Many of these entities are trying to compete with other financial institutions like banks to offer services like current, savings and fixed deposit accounts, as well as personal loans, mortgages and transfer of payments.
However, they still face challenges of inefficiency and ineffectiveness. They try using various systems in a bid to improve their performance and catch up with advancing technology, yet most times the expected results are not met.
Technology strategy is the only way to improve competitiveness.
Failure to develop and integrate technology in Saccos’ business is a major contributing factor to the decline of competitiveness.
Research indicates that technology strategy plays an important role in determining Sacco performance in the sector.
The use of technology can lead to innovations, which can result in output growth and the concomitant growth in jobs. The effectiveness of technology will influence the operations of savings and credit cooperative societies.
Therefore, Saccos should commit more resources into the adoption and maintenance of information technology systems since they influence their operations positively.
By David Kipkorir
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