Kenya’s Savings and Credit Co-operative Organisations (Saccos) are set to start sharing core banking services to help them expand market reach and save cash, thanks to a new platform dubbed Co-opTech. Launched yesterday in Mombasa, the utility will cushion credit unions that are struggling to install the latest Information Communication Technology (ICT) tools to deepen productivity by sharing.
The shared platform is embedded with a shared fund management platform that supports inter-Sacco lending and cross-Sacco funds transfer. Among other benefits is the ability to hook up to the National Payment Systems that will enable seamless transfer of funds from funds such as the Hustler Fund. Cooperatives Cabinet secretary Simon Chelugui said the platform accessible to all cooperatives is expected to enhance competition in the sector.
“A good number of Saccos owing to lack of strong financial muscle are unable to install current ICT models but through the new platform they will be able to access crucial services and more so expand their market share,” said Chelugui. “We expect other players in the industry will also launch similar. Government will therefore come in handy to ensure the process is well regulated.”
The facility will be run by Cooptech Limited, a financial technology-led company owned by the Cooperative Alliance of Kenya (CAK, cooperatives and individual members. The facility will help in upscaling and digitization of the cooperative financial services. “The new facility seeks to make affordable core banking services for many cooperatives that have been struggling to raise a huge budget to procure and maintain versatile transaction systems to deter cybercrime,” said Mr Chelugui.
Saccos will own the new platform by buying 65 shares, the same way they own shares in the Co-operative Bank of Kenya, while 35 per cent of the balance will be open to individual members whose cooperatives are members of the platform.
