A few years ago, a report by the Sacco Societies Regulatory Authority (Sasra) blamed the lack of embracing technology on their operations thereby losing much to mobile apps.
This was three years ago.
Fast forward to 2020, Metropolitan National Sacco embarked on reforms that has seen the Sacco on a new path to success, the second phase which is about embracing technology, is ongoing.
In 2018/2019, the Deposit Taking Sacco suffered a major setback as the loans advanced to members surpassed savings, some members were leaving because of the delays in processing their salaries and loans, more others had applied to stop being members of the Sacco and non-perfoming loans (NPLs) amounted to over Sh1.2 billion.
It took the intervention of the Cooperative Bank of Kenya to salvage the situation.
Co-op Bank through its Co-op Consultancy build capacity for the Sacco’s long term sustainability and also restructure the Sacco’s funding requirements to better manage the members’ monthly loan demands as well as the overall liquidity flows.
An approval of the transformation strategy at the 2019 Annual General Meeting (AGM) also put the Sacco on the path to recovery, this year, they reported that deposits by members grew by 6 per cent to close at Sh7.32 billion, they also recovered over Sh110 million of NPLs, attracted new members, retained those who wanted to leave and brought back those who had left, and appointed a new Chief Executive Officer (CEO).
The new CEO Benson Mwangi said, “Following the approval of the transformation strategy at the 2019 Annual General Meeting (AGM), we have recruited an additional 167 new members and received 2070 membership reinstatements from the previous period. In that period, we have also seen a rise in the number of members wishing to reverse their earlier requests to withdraw their membership”.
Technology and costs
The second phase of the transformation strategy is now live. The Sacco, which started as a Teachers’’ only savings group is planning to launch an online banking platform.
We are now embarking on phase two which will involve leveraging on technology to improve on service delivery, rolling out of new products and launching an online banking platform,” Mwangi said.
The changes at deposit-taking Metropolitan Sacco’s strategy are anchored on diversification, customer service excellence and development of new products.
The new technology-driven strategy has even reduced the Sacco’s costs of doing business.
“The operational efficiency initiatives resulted in an overall cost reduction of Sh96 million, mainly driven by savings in financial and administrative expenses which were further powered by enhanced uptake of digital service delivery channels,” the CEO said