How Mobile Money and Fintech Fueled SACCO Growth

Savings and Credit Cooperative Societies (SACCOs) are embracing mobile money and financial technology to expand their reach, meet evolving member demands, and sharpen their competitive edge in Kenya’s financial sector.

According to the SACCO Supervision Annual Report, 2024, published by the Sacco Societies Regulatory Authority (SASRA), the adoption of digital channels is no longer a peripheral activity but a core strategy driving growth in membership, savings, and credit.

The report reveals that the regulated SACCO industry continues to heavily rely on third-party financial institutions, mainly commercial banks, as well as fintech companies, to deliver their financial services and products, and alternative financial delivery channels.

The main alternative financial delivery channels deployed by Regulated SACCOs through commercial banks and fintech companies include mobile money delivery channels, ATM connectivity, Cheque financial services, Pesalink connectivity, digital credit and loans, SACCO agency business, among others, which are gaining traction in place of the capital-intensive traditional brick and mortar teller services.

The shift is a direct response to customer demand for real-time, convenient services.

It is important to observe that the continued usage of these alternative delivery channels is driven by customer demand for real-time financial transactions premised on financial technology. To ward-off competition from other financial. institutions, Regulated SACCOs must as a necessity embrace these technologically driven financial services delivery channels, while retaining their member-owned, members-managed and member-customer diatribe comparative advantages.

A total of 93.22% of all Deposit-Taking SACCOs (DT-SACCOs) had deployed USSD code-enabled financial channels in 2024, up from 89.66% in 2023.

The use of internet-enabled smartphone applications also saw a significant increase, with 63.28% of DT-SACCOs offering app-based services, compared to 52.30% the previous year.

SASRA stated that the digital transformation is most evident in the expansion of credit products.

SACCOs have also rolled out hundreds of instant, automated micro-loan products delivered directly to members’ mobile devices to compete with commercial banks and digital credit providers.

The number of distinct digital loan products offered by regulated SACCOs , increased from 251 in 2023 to 345 in 2024, with most loans falling under Ksh50,000.

Also Read: Why Select SACCOs Risk Being Shut Down

Consumer Behavior

This digital transformation is strongly confirmed by consumer behavior.

The FinAccess Household Survey 2024 revealed that a greater number of SACCO members now prefer mobile delivery channels (70.6%) over traditional physical visits (66.1%).

After physical branches, the most utilized channels were mobile phone apps (26.1%), USSD codes (23.8%), and SACCO paybills (19.8%), underscoring the deep integration of fintech into the member experience.

Also Read: Govt Issues Fresh Directives to SACCOs on Management and Loans

SACCOS Use Partnerships to Deliver Digital Offerings

• SACCO Agency Banking

SACCOS are using SACCO Agency Banking as a cost-effective alternative to brick-and-mortar branches.

By 2024, forty DT-SACCOs had deployed a network of 4,247 agents.

These agents processed transactions worth Ksh31.65 billion primarily for cash deposits and withdrawals, bringing services closer to members.

• Inter-Bank Connectivity

A growing number of SACCOs are partnering with commercial banks and fintech companies to offer Pesalink, which enables members to perform real-time, large-value cash transfers.

• Cheque Partnerships

Cheques remain important for large-value transactions despite the rise of digital payments.

DT-SACCOs partner with commercial banks, predominantly the Cooperative Bank of Kenya, to offer cheque issuance and clearance services to their members.

Technology Impact

Technology integration has become so essential that it now constitutes a new class of SACCOs’ business model.
Non-Withdrawable Deposit-Taking SACCOs (NWDT-SACCOs) are recognized by the regulatory framework as having the particular authority to *mobilize membership and share capital subscriptions via digital or other electronic payment platforms.

As of 2024, several SACCOs were employing this digital-first approach, including some that catered to the diaspora, such as M/S Kenya – USA Diaspora Regulated NWDT-SACCO Society Ltd.

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