Happening Now: MPs vet CBK Governor nominee Kamau Thugge
Slum-based sacco banks on technology to boost revenue
What you need to know:
- Members have access to credit without collateral, jobs, and bank accounts, and even with minimal savings.
- With increased automation Shofco expects to increase their capacity to offer more personalised financial advice to members.
A slum-based savings and credit co-operative society in Kibra, Nairobi, has adopted technology to attract more clientele and revenue.
The Shining Hope for Communities (Shofco) Sacco Manager Collins Odongo said the sacco, which works with small and mid-size enterprises has a new mobile platform from where members can either apply for loans or make payments.
This, he said, is in a move to avail ICT to conveniently offer all forms of their services through the mobile platform.
Mr Odongo, who spoke as the sacco marked its fifth anniversary said Covid-19 pandemic has driven the co-operative society to fully embrace technology.
“And there is no going back, since it has endeared us to the dynamic, youthful and urban slum-oriented segment. The Covid-19 pandemic has essentially opened our eyes to the unexploited ICT channels that we can use to reach out to, and inform our members. This, we shall enhance and perfect,” said Mr Odongo.
He revealed that in the next five to 10 years, as they expand to all major slums in the country, they seek to have a fully automated sacco where members will do everything online.
With increased automation, he added, they expect to increase their staff capacity to offer more personalised financial services to their members.
“We are currently focusing on diversifying our services towards ensuring that members can access every financial service that they need from their sacco and take advantage of the synergy of their numbers to gain bargaining power for their own benefit,” Mr Odongo said.
With the prospects of saving from as low as Sh300 per month, the sacco which touts itself as an affordable option, outlines its mission as being to empower its members –largely made up of slum-dwellers– economically through mobilisation of savings and provision of affordable credit services. It envisions a three-fold asset growth in the next five years.
“This will be as a result of the growth of the net-worth in individual members as well as the sacco’s institutional worth,” Mr Odongo said.
He also revealed that while the savings and credit co-operative society previously mostly worked with communities living in slums, it is considering opening its doors to other city residents.
This will see it increase its credit offerings as demand for cheap loans rise among underprivileged households.
“We are still deliberating internally to see how best to roll it out. But our main focus at the moment is to extend our operations in all slums across the country,” he said adding that the institution also considers extending capital relief to struggling businesses and individuals hit by the coronavirus pandemic through loan restructurings and moratoriums.
“So far we have restructured loans worth more than Sh10 million since April when the pandemic hit. And we hope to extend this to more families affected,”
This, he cited is in response to Central Bank of Kenya’s directive in April for SMEs to contact their financial providers for assessment and restructuring of loans based on their circumstances with banks, saccos and digital lenders to cushion struggling households from the effects of the pandemic.
Shofco Chief Executive Kennedy Odede indicated that up to 86 percent of the sacco’s 4,000 members are women. He attributed this to the demographics in most slums across the country.
Members have access to credit without collateral, jobs, and bank accounts, and even with minimal savings.