The Saving and Credit Co-operative Organizations has one big advantage that most of the financial institutions don’t have, and that is their customers are the owners of the organization. For this case the customers of the organization will care much on the growth of the SACCOs since the growth of the organization means their growth, Hence with other options available, it is expected from them to choose their SACCOs before any other financial institution.
The primary key of the formulation of the SACCOs is to alleviate poverty in the community by giving the unbanked population access to financial services. SACCOs do provide loans, keep savings like any other banks that are available in that community. From a purely financial point of view, SACCOs offers a higher rate of interest on savings and a lower rate of interest on loans than banks.
But higher interest on savings and lower interest on loans will not be enough to attract people to join SACCOs or for its member not to think of taking loans on a bank if they don’t get good services, most of the SACCOs needs huge improvements on their service delivery in order to be the most preferred financial institution than retail banks.
Some of the improvements that they have to do are:-
1. To provide loans within a short time.
Banks have improved so much on providing loans in a short time comparing to SACCOs. With the help of the technologies that banks have invested, they can quickly access the information of their customers on their cash flows and their habit on financial management, they can access credit reports to see if the customer is eligible to take a loan and this quicken the process of decision making for loan approvals, they have many channels ( ATM, Mobile banking, e-banking ) for their customers to access the loan once it is approved. All of these and others facilitate the loan process and so if SACCOs leverage them they can be able to provide the service in the level that banks do.
2. Savings to be accessible in different channels.
For most of the SACCOs, if a member wants to withdraw money from his/her saving, a member has to request for the certain amount s/he want to withdraw and an officer to go at the bank where they have a saving account to transfer that amount to member’s bank account, and if the member will not have a bank account, s/he will have to go and fetch the money at the office. The time between the request was made to money was received by the member will be subjected to the time a member and an officer will have to make those movements and also it will be costful. But for the case of the banks, they have invested in systems that allow the customer to access their money wherever they are.
3. Availability of members information as they are needed.
When you go to a bank and ask for your transaction history ( bank statement ), it won’t take more than 10mins to get it. And it has gone far now that you can get your statement from the e-banking (accessing of your information from the computer system) anytime. Banks also have mobile applications that their customers can see their balance, do some activities by their own without going to the branch. But for most SACCOs, they are still in manual works which leads to delays when a member wants to access his/her information. They can choose to improve their services on members management and information management of their organization by investing in these systems so as to serve well their members.
4. Easy transferring of money from one member to another.
Bank has managed to simplify the process of people sharing money wherever they are through mobile banking, mobile applications and electronic banking (e-banking). SACCOs too can use those media to help their member to share money by transferring saving of an account of a certain member to another member. By this, one member can be able even to pay a loan of another member when their loans are due and they don’t have money at the moment.
All of those above improvements can be achieved by the SACCOs when they decide to invest in technology. For this twenty-first century, technology is inevitable, it either you choose to leverage it or accept to lack behind on the industry which is obviously not a good choice.
Few of the SACCOs, small and large, have managed to start this journey to success in their service delivery, we advise you should too. Don’t be frustrated if you are too behind, Singo Africa Limited, a technology and consulting company has aimed at playing a part on alleviating poverty in the unbanked community by supporting SACCOs on their way to improve their services by working with them step by step from operations to management level. You can contact us and have our consultants work hand in hand with you to start from where you are to the level that you want to be.