Savings and Credit Cooperative Societies (Saccos) are leveraging on technology to catch up with market trends and safeguard their market-share. Technology is reshaping the financial industry forcing Saccos to match up with the trend or risk being left out.
Saccos have embraced digital loans to provide quick cash to members through their mobile money wallets. Nation Sacco is among ten Saccos that have joined the digital lending space.
Entry into digital loan platforms is a move seen to safeguard their market flooded by independent digital lenders such as Tala, Branch, and Commercial banks such as Equity and KCB.
For instance, Nation Sacco sent this message to their members, “Don’t get stuck to sort out emergencies. Jisort na M-advance today by dialing our code.”
Even with the move to digital lending, Saccos only provide credit to their members as required by the Kenyan Laws. Saccos collect monthly contributions from their members then give loans depending on the shares held.
Digital loan apps have disrupted the market thus challenging traditional players such as banks and Saccos to rethink their strategy. Sacco’s entrance into the digital lending space is seen to protect their interest and prevent members from relying on other sources for short term loans.
Saccos have also revised their lending terms to allow members to borrow four times their savings. Previously, members would borrow amounts worth three times their savings and with shorter repayment periods.