Exploring The Next Wave Of SACCO Innovation

The recent Africa SaccoTech Forum 2024, hosted by dx⁵, explored the exciting possibilities of digital banking and its role in the next wave of SACCO innovation.

Grace Watsiera, Head of Programmes at ACCOSCA, delivered a keynote titled “Explore the Next Wave of SACCO Innovation.” She emphasized the power of collaboration, encouraging SACCOs to work together and leverage the technology to enhance services for their members.

Africa boasts 11 of the 20 fastest-growing economies in 2024, with East Africa leading the growth momentum. Technology presents a powerful solution for SACCOs to navigate the challenges and opportunities of this growth. As Watsiera quoted from a speaker at a conference she attended 10 years ago, “SACCOs that will win in this battle are SACCOs that embrace technology.” Early adopters have already demonstrated success in countries like Kenya, Tanzania, and Malawi.

The operating environment for SACCOs isn’t without hurdles. High inflation, global conflicts, and currency fluctuations all pose challenges. Additionally, regulatory landscapes are becoming stricter, focusing on protecting member wealth through stricter rules around taxation, interest rates, and managing member financial distress.

The shift from traditional branch-based operations to mobile internet transactions, integrated payment systems, and shared services is crucial. Africa’s youthful population, with a median age of 18, demands convenient and tech-driven financial solutions. “Africa today is a youthful continent with a median age of 18. Gen Z are members that require different kinds of services and if SACCOs don’t jump on board they will be missing that opportunity,” said Watsiera.

The presentation also examined global trends concerning SACCOs. Building trust and resilience are paramount. “We pride ourselves on banking the unbanked,” stated Watsiera. “It is that trust that helps the members have the confidence to navigate their financial journey.Conversations around ESG (Environmental, Social and Governance) practices are also becoming increasingly important for driving sustainability in SACCOs.

Collaboration is another key trend. Watsiera reiterated the importance of collaboration, emphasizing that partnerships with fintech companies can enhance cloud computing and AI capabilities, leading to better member engagement, improved service delivery, and efficient financial reporting. Smaller SACCOs can leverage third-party integrations to expand service offerings and cater to a wider membership base. Regionally and continentally, collaborations can create strategic alliances, drawing on Africa’s shared experiences, demographics, and cultures.

Looking at the statistics, one-fifth of cyber attacks target financial institutions. Cybersecurity concerns are a growing threat, and collaboration is needed to mitigate cyber risks.

By embracing technology, fostering collaboration, and prioritizing member trust, SACCOs, as highlighted by Grace Watsiera, can be a driving force in empowering African communities and shaping a financially inclusive future for the continent.