The government of Kenya has announced plans to consolidate accounts of Cooperative Sacco’s under a shared platform for banking services to curb emerging cases of cybercrime in their operations.
The move under the Cooptech facility is expected to increase accessibility and streamline various banking services which for long have been a big challenge to the majority of the cooperative societies due to a lack of financial muscles and other endowments.
Cooperatives, micro, small and medium enterprises development cabinet secretary Simon Chelugui said the platform will be accessible to all cooperative Sacco’s and that the concept was to enhance competition in the Sacco movement and secure members’ deposits.
“Technology cannot work alone, behind every transformational technology there must be a transformational leader. However, as we invest in technology it would also be prudent to invest in cyber security due to the rapid increase in cybercrime which has emerged as an issue of great concern across the divide. I urge all SACCOs to implement strong and proper internal controls to protect members’ investments,” he said.
The CS announced the launch of the Coop Tech platform stressing that technology was the global drive in every sector and had become an integral part of investment and related transactions to protect the interest of members in the co-operative movements.
“A good number of Sacco’s 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.
The government he noted has rightfully identified cooperatives as a vehicle through which it will achieve its transformational objectives and promotes inclusion and environmental sustainability hence helping in creating a more prosperous and equitable society for all “, Chelugui said
The CS further emphasized that the national government’s bottom up economic model is best exemplified by the cooperative business model that taps its strength from members and mobilization of those at the bottom of the pyramid can be effectively done through cooperatives.
Daniel Marube the chief executive officer of Cooperatives Alliance of Kenya (CAK) noted that investing in cyber security is expensive.
“When cooperative societies come together through the Coop tech platform, we will be able to employ the most expensive technology and experienced people to protect our members,” he said.
He explained that Cooperatives will need to buy shares at Sh5,000 per share to join the platform saying that the small Sacco’s will pay between Sh350,000- Sh500,000 while the big ones will pay shares of up to Sh10 million as a one off payment.
“Every year, the societies remit a lot of money in terms of licenses. But with this system, they will be paying a one off amount in terms of shares. They stand to save billions of shillings because every cooperative pays an annual price of about SH1.5 million on licenses only besides other costs,” he said.
Marube said the platform will also make technology affordable to those members because currently, a simple system could cost one society over Sh100 million.
“Instead of each cooperative buying its own system, we are saying let’s come together, spend maybe SH10 million so that the rest SH90 million can be available to the members as loans,” he said.
“We also want to enable cooperatives to improve their image. The image of cooperatives has been bad for a long time. For instance, being behind technology, not being attractive to the youth, constant delays in processing loans, loss of documents and old machinery and equipment,” the CEO said.
He however added that the platform will help uplift all the cooperatives participating in the platform into a completely new world of technology. Technology will enable cooperatives to attract the youth because they are technology enabled.
“At the end of the day, we want to have one cooperative movement with one till number and we will be respected as cooperatives,” Marube said.
“We will be able to borrow money amongst ourselves, we will be sending remittances and receiving money from all over the world. We can also be able to negotiate with the Government once we have enough funds together to invest in different bounds. This is the beginning of building a strong financial institution,” he added.
Cooperatives play a key role in socio-economic development in Kenya, they are found in all spheres of the economy including agriculture, finance, housing investments, transport, insurance and even diaspora. Kenya has over 28,000 cooperatives with a membership of over 14 million. Cooperatives also control assets of over ksh 1.5 trillion
