Why SACCOS in Kenya should focus on employment and digital skills?
Savings and Credit Cooperative Societies (SACCOS) have remained at the forefront of mobilizing savings for millions in Kenya. They have resulted in a huge impact on financial inclusion in Kenya, especially in rural areas. There are 9.2 million people associated with credit unions in the country, saving around $13 billion, according to WOCCU’s statistical report 2020.
Cooperative societies in numerous capacities have been contributing towards the achievement of inclusive growth and sustainability. They have embraced their key goals of generating employment, education, and reducing poverty. According to The Ministry of Trade, Industry, and Co-operative Development, 80% of people in Kenya generate income either directly or indirectly through cooperative activities.
As the informal financial sector continues to grow, there have been many challenges in the journey. COVID-19 has severely hindered the growth of SACCOS. The pandemic forced them to stay at home and work remotely as much as possible. This was majorly due to reliance on traditional practices of managing finances. Moreover, fraud and theft have also remained tough challenges to beat for SACCOS.
We believe going digital can help solve many challenges that SACCOS face today. It will require them to focus more on tech-based employment and digital skills. There are 3 substantial reasons why going digital is the way to move forward.
Mobile money adoption
Today consumers have become digitally advanced and their requirements are continuously changing. They prefer mobile wallets to send money and make day-to-day payments. SACCOS must adapt to this change and focus on building digital skills. It will not only help them meet the changing requirements of members but will also enhance their operations. Embracing digital systems and technologies can help them stay ahead of the curve.
Africa is witnessing the rise of new-age workers who are digitally sound and accustomed to digital systems. Cooperative societies in countries like Kenya, Tanzania, Uganda, and Ethiopia have become major employers in the informal economy. SACCOS need to focus more on generating direct or indirect employment for such workers. More employment opportunities can help the country to utilize its greatest asset for growth – people!
Close the digital divide
COVID-19 pandemic has accelerated the digital transformation in Africa. However, a massive digital divide persists in many countries. SACCOS can play a crucial role in closing the gap by promoting digital skills amongst millions of members they hold. They can help expand digital financial services in the informal sector. Furthermore, SACCOS can help generate employment in the IT sector to boost the digital economy.