Solidarity, community, collaboration. These are what society need when a country’s economy is strongly affected by a global pandemic. Lockdown restrictions and the resulting economic shock has impacted many people who are facing an unstable financial situation.
The good thing is, a number of them are supported by Savings and Credit Cooperative Societies (SACCOs). They can save money and apply for low-interest rates loans. Members have the opportunity to benefit from simple loan terms and conditions. Compared to traditional banks, SACCOs offer members better interest rates if members need a loan during these challenging times.
Historically, SACCOs proved more popular amongst Baby Boomers and Gen X. They who are used to visiting SACCOs branches and saw the benefits of being a member of SACCO from a long way off. What also contributes to this sense of community is the fact that there is usually a common bond between SACCO members; for example, they work in the same industry or live in the same area.
With the financial crisis and more people than we can keep up with getting laid off, SACCOs are highly influenced. Members suddenly have to withdraw their savings to cover basic needs. This has affected SACCO liquidity and their ability to provide financial support to all its members. In times like these, society must collaborate and jointly create a better environment for everyone. Joining a SACCO now will contribute to the nation’s economic resilience and in turn, boost the institution’s ability to support members. Starting to save money will further generate a healthier financial situation for members even once the pandemic subsides.
This unprecedented situation also urges SACCOs to become more innovative. For instance, by choosing to go fully digitised with their operations that allow members to transact anywhere. As SACCOs embrace digital transformation, they become more capable of supporting their members in difficult situations.
Secondly, digital transformation has the power to attract more members especially the younger generation kind. This generation is tech-savvy. They grew up with computers, the Internet, and smartphones. They are used to smooth digital consumer experiences and would like to check their financial status within minutes or initiate transactions from the palm of their hand.
Lastly, digitised SACCOs are safer than SACCOs that follow traditional processes since cloud-based platforms store information more securely, with multiple backups that cannot be compromised by fire or physical theft. This facilitates the audit processes, enables effortless compliance, and guarantees members their accounts are safe.
A challenge that SACCOs might face when implementing their digital transformation is how to choose the banking platform that provides appropriate services. Here, there are two important criteria to keep an eye on. First, it is important to look for partners that offer outstanding customer support. This will facilitate staff to become familiar with the platform and its functionalities. Second, user-friendly platforms should be a high priority, so staff can adapt processes easily and seamlessly.
In moments like this, collective thinking is key. Joining a SACCO now is a great opportunity to start saving and contributing to SACCOs’ resilience. Aside from that, SACCOs offering digitised services will be better prepared to welcome Millennials and Generation Z which leverages financial inclusion.
Cynthia Wandia is a Co-founder and CEO of Kwara.
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