How digital platforms can transform SACCOS in Kenya - Wakandi Group

The financial sector across Africa is witnessing a digital transformation. Equity Bank Kenya Limited reported a rise of 38% in merchant banking digital payments. Beyond commercial banking, mobile wallets have become extremely popular in retail transactions amongst the common people. 

SACCOs have been working as an integral part of the industry, aiming to match the pace of digitization, However, they mostly rely on manual processes for day-to-day operations. They mostly manage their records like contributiond and loans in physical documents and manually write all the entries. Furthermore, all transactions majorly happen in cash. All this brings a number of challenges in the longer run.  

• Lack of compliance – Compliance with government regulations and finance acts is highly important. Their guidelines are receives updates from time to time. SACCOs need to make changes in order to comply with the updated guidelines. Such updates can be quite difficult with manual processes as they can be slow and require more effort.  
• Poor record management – While manual entries of transactions can be quick, there are more chances of errors and missing entries. Moreover, it becomes hard to trace all transactions with 100% accuracy. 
• Fraud and theft – Paper documents and cash transactions can lead to theft fraudulent activities. Such records can be easily manipulated and cash can be easily stolen. 
• High competition – The growth in the finance sector brings immense competition to the SACCOS from banks and microfinance institutes. Not upgrading with the pace of the market can lead to many missed opportunities. The members may look for organizations that can serve them better.   

The role of digital platforms for SACCOs in Kenya 

Digital platforms can transform the way SACCOs operate. They can digitize the day-to-day tasks to bring better speed, security, and transparency. While enabling better services, digital platforms can also help solve various challenges they generally face. 

Adopting digital platforms brings automated record management as every transaction is saved online. There will be no manual entries which will significantly reduce the chances of errors while offering 100% accuracy. 

Such digital record management will also reduce the chances of fraud and theft. Every person will be able to view the transactions, and only a few will have permission to edit or delete them.  

Digital platforms can bring better speed and security in whatever they do. Be it, deposits, loans, managing finances, adding new members, etc. members can do everything in a matter of seconds. Moreover, every transaction will be done in a secure and transparent way.

With everything recorded formally, better and more compliant records can be made. Consequently, it will be easier for SACCOs to stay compliant with the latest government guidelines and new acts. Furthermore, they will be able to offer better services while serving effectively the changing needs of their members.

CAMS as a digital platform for SACCOs

Credit Association Management System (CAMS) is a digital financial platform that SACCOs and microfinance institutions can use to offer services to their members digitally. It helps you manage loans, keep transaction records, generate regulatory reports, add or remove members, and other day-to-day operations.

CAMS is designed in close collaboration with cooperatives and apex organizations so it solves the problems that users actually face. Read more about CAMS or reach out to our team members to get more information on the system and it can add more value to a SACCO.

Conclusion

In the wake of digitization, SACCOS in Kenya are attempting to digitize their daily transactions. They are using mobile money to send or receive money. Adoption of digital platforms like CAMS can speed up the processes and make things more secure and transparent. However, technical expertise remains a challenge as that may slow down the whole adoption process. SACCOS adopting digital platforms will see better growth in the longer run.