HOW TO OPERATE A MODERN, COMPLIANT, AND PROFITABLE SACCO.
A Sacco is a member-owned financial cooperative society whose purpose is to pool savings from members and use the funds to provide them with affordable credit.
A regulatory body regulates SACCOs; for instance, SACCO Societies Regulatory Authority (SASRA) regulates SACCOs in Kenya.
To operate a modern and profitable SACCO, there are a few things that need to be taken into consideration. This includes understanding the latest technological advancements, awareness of new opportunities and threats, and understanding members’ needs and wants.
This article overviews how to operate a modern and profitable Sacco. It discusses the importance of technology, awareness of new opportunities and threats, and understanding the needs and wants of members.
Make better use of data.
Take advantage of your data to learn more about your members, evaluate the condition of your SACCO, and discover market trends.
Reliable statistics can help you decide where to concentrate your efforts and investments for the best results because every industry has seasons.
You will surely need a reliable SACCO management system to support and assist you in maximizing your data to achieve this. I’m talking about a SACCO core banking system that has business intelligence features for better reporting, to put it simply.
Data is more critical in SACCOs since numbers are essential.
The phrase “data-driven” has gained popularity for a reason. Organizations that have successfully used their data have seen results because it is effective.
Know your SACCO members
If you don’t understand someone’s goals and needs, you can’t help them grow.
Members have a variety of goals, such as access to credit facilities, finding innovative ways to save money, making long-term investments, or finding a trusted financial partner for their businesses.
Awareness of your members’ challenges and taking action to help them find solutions are the first stages of providing excellent customer service.
Surveys, in-person interviews, and data analysis can be used to find trends about your SACCO members, such as which of your products they consume most frequently and when.
Good use of data can be beneficial in this circumstance as well.
You have a responsibility to understand the needs of your SACCO members. However, some SACCOs believe that members are there simply because they need access to credit facilities.
Some members have probably been SACCO members for more than 17 years without ever applying for a credit facility.
This case study shows how Total SACCO used a reliable SACCO management system to improve their customer experience by 50%.
Get a reliable mobile banking system.
You can’t fight mobile domination.
You can only embrace this. Several factors contribute to the daily revenue losses experienced by SACCOs that don’t have reliable mobile banking systems.
No member wants to wait for hours in line and fill out paperwork to transact or apply for loans.
In our most recent survey, we discovered that most members consider convenience when deciding whether to join a SACCO. For them, convenience is having quick access to your services whenever and whenever.
You can raise revenues from member transactions, increase deposits, and improve the customer experience using an excellent mobile banking system.
Lainisha SACCO increased revenue by more than 80% and improved customer experience by 75%, thanks to the M-SACCO mobile banking solution.
Make service quickly available for members.
I’m guessing you and your SACCO members are both very busy.
Time is valuable to everyone, and your SACCO members expect quick, efficient service.
Improve the level of service you offer to your members by using automation. Manually run SACCOs lose money, members, and public confidence.
An emergency loan will become irrelevant when delayed by a few hours. It’s no longer a loan for emergencies.
For example, if a member requests an emergency loan, they expect to receive the money or hear back within a few minutes.
You might assume that your SACCO cannot afford automation. Automating your processes is less expensive than manual operation.
Post Bank SACCO reduced operational costs by 40% and increased revenues by 60% through members’ transactions.
Make work easier for your staff.
Your team drives SACCO’s overall growth and the customer experience.
They can only deliver better results if you give them the proper tools to work effectively.
They are prone to making errors because they are humans. Your operations will become more efficient if you automate them, which will help you avoid costly unintentional errors.
Your team will save time and work more efficiently with automation. For instance, the CoopMIS SACCO Management System has an automatic SASRA reporting feature that can free up your team’s time to focus on other responsibilities and save time on report preparation.
Use a SACCO Management System with Marker Checker Feature.
The marker checker feature will show you a step-by-step record of events and users involved in a particular exercise, processing and approving member loan requests.
Many SACCOs have been victims of fraud, which is not something that will end soon, especially for SACCOs with manual operations.
When proper audit trails are implemented, you can easily trace the fraudsters, stop their activities, and prevent future incidences.
Setting up various approval rights and easier access to resources to authorized personnel will play a significant role here.
Learn more about how you can reduce fraudulent activities in your SACCO
Invest in cybersecurity
Financial institutions are one of the most targeted industries by cybercriminals.
Of course, SACCOs make a considerable part of that.
Invest in secure systems that will help you prevent loss of funds and data through cyber-attacks.
At least start with a web-based system, train your internal teams on the importance and best practices of cybersecurity, then work with experts in the industry.
Usually, your SACCO system vendors partners with cybersecurity experts to offer you a more secure system. This is because their core business is to provide your SACCO with a seamless solution to operate your SACCO. Partnering with a cybersecurity expert will add more value to the SACCO, considering it strengthens the system’s security.
Empower members on financial literacy
A member who knows the benefits of savings and financial discipline is a valuable and long-term member of any SACCO.
Once your members know the benefits they can get from the SACCO, they can save more and consume more of the SACCO products.
They will be your brand ambassadors by advocating for your SACCO and inviting their families, friends, and colleagues to join the SACCO. Hence increasing your memberships, deposit rates, and revenues.
Savings discipline, budgeting, investment knowledge, etc., are common knowledge that many people lack, and educating them on these items is a win-win for both the SACCO and the members.
Member education doesn’t have to be costly or time-consuming. You can set a date and have a virtual meeting with your members for like an hour or more to educate them on better ways of spending, budgeting, saving, and investing.
Embrace digital marketing
Make sure to include digital marketing in your overall marketing strategy.
In this day and age, people rely on Google and social media platforms for information. This means that current and prospective members seek your services from online platforms.
Cooperatives without an online presence are losing business opportunities, membership, and public trust.
In most cases, prospective members will go online and search for the best and most reputable SACCOs. They will look at factors such as dividend rates, terms of loans, membership eligibility, social proof from your current members, and alternative avenues to access your services, e.g., mobile banking.
In this situation, those SACCOs with a good presence on the web and various social media platforms will win over those with no presence.
You can use these platforms to support your current members whenever they have any queries, share updates on progress made by the SACCO, e.g., the acquisition of new assets, and showcase any existing offers you may have for your members.
A report from FSD Kenya shares how Kenyans resort to social media platforms, especially Twitter, to resort to issues and find answers from various institutions. This was back in 2019; how about now, when access to the internet has gotten easier and more people are becoming aggressive in using social media platforms?
Conclusions.
In conclusion, here are a few key things to remember when you want to operate a modern, compliant, and profitable SACCO;
First, invest in reliable systems to help manage your finances and members. Second, stay up-to-date on the latest compliance requirements. And finally, always focus on ways to improve your member experience.
Many reliable systems are available to help SACCOs operate in a compliant and profitable way. Book a free demo of our systems today to get started.
