Factors contributing to member exits from SACCOs

Savings and Credit Cooperative Organizations (SACCOs) play a vital role in Kenya’s financial sector, offering crucial services to members. However, in recent times, there has been a notable increase in member exits from SACCOs nationwide. Some Saccos have shut down their operations with the savings of the members, something that leads to a legal battle that takes years to solve.
Recently, founder of Ekeza Sacco David Kariuku Ngari alias Gakuyo was arrested on his way out of the country at JKIA. Gakuyo has been on police radar over allegations of embezzling over Sh1 billion from members of his Ekeza Sacco. He however negotiated a deal to pay back the money to the claimants. Such SACCO leaders make members to exit the facility.
Factors Contributing to Member Exits from SACCOs
1. Lack of Transparency and Accountability
Many members cite the perceived lack of transparency and accountability within SACCOs as a significant reason for their decision to withdraw. Instances of improper utilization of contributions and questionable financial management practices erode trust and confidence among members.
2. Poor Governance and Leadership
Instances of poor governance, including mismanagement and corruption, undermine the credibility of SACCOs. Members often feel disillusioned and opt to withdraw when they perceive a lack of effective leadership and governance.
3. Inadequate Product and Service Offerings
SACCOs must continually adapt to meet the evolving financial needs of their members. Failure to offer relevant and competitive products and services can lead to dissatisfaction among members, prompting them to seek alternatives.
4. Limited Access to Credit
Among factors contributing to member exits from SACCO is access to credit, a key motivator for individuals to join SACCOs. However, if SACCOs fail to provide timely and affordable credit facilities, members may opt to withdraw in search of better lending options.
5. Technological
SACCOs that do not embrace modern technology risk losing tech-savvy members who seek convenient digital banking services. SACCOs must invest in technology to remain competitive and retain members.