Saccos told to drop 'old people' tag with fintech

Tuesday April 5 2016

Kenya Union of Savings and Credit Co-operatives Limited (Kuscco) managing director George Ototo (left) and national chairman George Magutu at the Laico Regency Hotel in Nairobi on March 30, 2016. Mr Ototo welcomed the formation of partnerships between county governments and saccos to run credit schemes for low income earners. PHOTO | SALATON NJAU |

Kenya Union of Savings and Credit Co-operatives Limited (Kuscco) managing director George Ototo (left) and national chairman George Magutu at the Laico Regency Hotel in Nairobi on March 30, 2016. PHOTO | SALATON NJAU | NATION MEDIA GROUP

By JAMES KARIUKI
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Savings and credit societies have been urged to adopt financial technology (fintech) inorder to attract young members and keep pace with changing tastes.

With their affordable loan facilities, Saccos are quickly gaining currency among the youth, but their traditional approach to finance has rendered them unattractive.

Safaricom Saccos’s chief executive Mr George Ochiri and Stima’s Paul Wambua joined Kenya Union of Savings and Credit Co-operatives(KUSCCO) chairman George Magutu in calling upon saccos to change their business models if they wished to lure young employees to patronize their products.

Mr Ochiri said a survey conducted by Safaricom Sacco discovered that the average age of their members was 27 years which meant that many of their members spent time online forcing the Sacco to embrace technology as its most preferred mode of communication and dissemination of information to its clients.

“The Rununu Loan is the most popular and we have discovered that our members mostly prefer to apply for it between 11pm and 3am. It is fully automated where appraisals and approvals are done automatically for short term loans,” he said.

Mr Wambua said that while there was a need to design products around youth-friendly topics, products and tastes, caution should be taken not to bundle all youth in one place as their interests were diverse adding that Saccos need to temper their products with non-financial services such as mentoring, internship and financial skills workshops.

MAKE THEM FEEL MODERN

“Engage parents, mentors, community leaders and school communities via social engagements where essential data will be collected for collation. Bring services to the youth that make them feel modern such as ATM Cards, mobile and Internet banking and specifically recruit staff who should be trained for the youth programme,” he said.

Speaking during last week’s Sacco Leaders’ Convention at Nairobi’s Laico Regency Hotel convened by KUSCCO, Mr Magutu said saccos must embrace provision of mobile financial services to remain relevant and deepen financial inclusion beyond their traditional area of jurisdiction.

He said KUSCCO was piloting an IT based cloud platform with nine saccos boasting of 55,000 members to run their operations ahead of a national rollout for all low capitalised saccos thereby enabling them to offer better services while employing lean staff.

“An Unstructured Supplementary Service Data (USSD) and money transfer service is on course and will be introduced nationally in due course. KUSCCO wants low capitalised saccos to share the platform and pay for the same on a per user basis.

It is a much safer model since it boasts of a cloud based secure service that any member can access by using a mobile phone with a text based service or any internet enabled gadget,” he said.

Saccos, they said must erase the ‘old people’ tag and lure youth within their mind sets as to nurture a saving culture that seems to have be largely lacking among the youthful population.