challenges facing SACCOs

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SACCOs are facing a number of challenges from technical, operational, and legal.

Here are some of the challenges listed and solutions explained in the simplest manner possible.



Most SACCO’s are based in one region without branches across the country. This makes it next to impossible for members outside the region to access the SACCOs and their services.

For instance, a SACCO that started as a farmers’ group in a particular town has grown in membership and revenues over the years. Some of the members decided to move to other parts of the country for their own reasons.

As a SACCO will it be economical to open branches across all the regions just to serve a few members?

If not, how will those members get access to their savings and your services?



Make use of alternative channels like mobile banking, agency banking, and even members portal.

These solutions will help the SACCO to;

  • Increase revenues through members transactions
  • Offer SACCO members more convenient services
  • Makes members more active than before
  • Increase in membership due to the convenience offered
  • Reduce operational costs, ie opening and running physical branches

With other options like agency banking, you will be able to reach the unbanked populations. Get the unfair advantage and capitalize in places where other financial institutions have abandoned.

With agency banking, you will help in solving the unemployment challenges by giving people an opportunity to serve as your agents with lower operational costs.



SACCO members complain of slow services such as delayed loan approvals. This may be caused by the use of manual processes, unreliable technologies, and internal bureaucracies.

Customer convenience is a key element in any financial service institution.

Delayed service delivery may end up depreciating the value or relevance of services you offer to members.

For instance, a member applies for an emergency loan, which means that they need the funds ASAP to solve an urgent matter.  If he/she ends up getting the loan a week later, that makes it irrelevant considering the time factors.



Use a reliable core banking solution that will quicken your SACCO’s operations. It’s better to get a cloud-based and multi-platform solution that can be accessed from anywhere at any time by authorized users.

For instance, the people responsible in the final approval stage are not in the office at that time, using core banking systems like CooPMIS will enable them to make approvals at any time from anywhere.

SACCOs that have used good core banking systems have had great growth and improved their customer experience.

You can check out how Total SACCO improved their customer experience by 50% using CoopMIS.



SACCOs face a lot of competition from other financial service institutions and digital lending solutions.

Low-interest loans are no longer a selling point therefore SACCOs need to understand the market needs and act upon them.

Be honest to yourselves as a team and find the answers to these questions;

  • Do you understand what your members’ needs, your target market needs, and what you can offer to solve their problems?
  • How unique and valuable is are your products and services compared to other institutions?
  • How equipped are you to adapt to the changing trends and customer needs?
  • What are the weaknesses that you need to improve on and the strengths you can capitalize on?

To serve better and to stay relevant, you need to have the answers to the above questions.



Use systems with business intelligence and analytics capabilities to understand your members and your products better.

Such reports will help you understand the products that do well and what members really need and which products to capitalize on.

Also, your sales and marketing teams need tools that will make their work easier and efficient. You can equip them with POS systems (Point of Sale) for easier member registration helping them capture the right data in real-time.



Use solutions with better data management and reporting capabilities.

A good core banking solution enables SACCOs to use data to their advantage, and automated reporting will help in compliance and quick decision-making process.

For SACCO executives with busy schedules, it can be a challenge if they can’t access the reports at their convenience.

As key decision-makers, SACCO executives need to have the financial position of the SACCO at their fingertips at all times.



Use solutions with better data management and reporting capabilities.

A good core banking solution enables SACCOs to use data to their advantage, and automated reporting will help in compliance and quick decision-making process.

SACCO executives will be able to check on the status of the SACCO and other important reports on any device, any time from wherever they may be.

Also, the reports will be real-time and can be customized hence more relevant.



Some SACCOs have been limited from innovation because they use incompatible systems.

For instance, they are unable to integrate their core banking system with mobile banking or agency banking.

Most of the time this happens in cases where the system vendor wants to be the sole system provider to the SACCO.



Use systems that can be integrated with other systems regardless of the service provider.

In the process of procuring a system, ensure the system meets your requirements and it is future-proof ie, it will still be relevant for many years to come.



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