How SACCOs are transforming the transport sector
The transport sector plays a critical role in the economic development of any country. In Kenya, the sector is a significant contributor to employment and income generation, as it facilitates the movement of people and goods across regions. The sector has seen considerable growth in recent years, and one of the key drivers behind this transformation is the rise of SACCOs (Savings and Credit Cooperative Organizations). These cooperatives are playing a vital role in reshaping the landscape of public and private transport by providing financial support, improving access to vehicles, and enhancing the operational efficiency of transport services. Below we explore how SACCOs are transforming the transport sector.
Facilitating Access to Affordable Financing
One of the main ways SACCOs are transforming the transport sector is by making it easier for operators to access affordable financing. Historically, transport operators, whether in public service vehicles (PSVs) or freight transport, have faced challenges in securing loans to purchase or maintain their vehicles. Many financial institutions viewed the sector as high-risk, often leading to a lack of credit for potential operators.
However, SACCOs have stepped in to fill this gap by providing financial products tailored to the needs of transport operators. These include low-interest loans for purchasing vehicles or upgrading existing ones, as well as flexible repayment terms. For many operators, this has been a game-changer, as they now have the means to invest in new vehicles or maintain their fleet without straining their finances. This access to credit has encouraged more people to enter the transport industry, thereby expanding the overall capacity and coverage of public and private transport systems across the country.
Improving the Professionalism and Safety of the Sector
SACCOs are not just about providing financing; they are also instrumental in improving the overall professionalism and safety of the transport sector. In the past, the transport industry was often characterized by poor safety standards, a lack of regulation, and an unstructured approach to operations. Drivers, conductors, and operators often worked in isolation, which contributed to inefficient operations and unsafe practices.
To address these issues, many SACCOs now offer training programs for drivers and other personnel in the transport sector. These programs focus on safe driving practices, customer service, and adherence to traffic regulations. The goal is to create a more professional workforce that upholds high standards of safety and service, benefiting both the operators and their passengers. Additionally, SACCOs have been instrumental in improving vehicle maintenance standards by offering their members access to affordable repairs and maintenance services. As a result, the overall safety of transport services has improved, reducing accidents and promoting a safer travel experience.
Providing Insurance and Social Security
Another significant way SACCOs are transforming the transport sector is by offering affordable insurance products to transport operators. Insurance is crucial for the transport sector, given the risks involved, including accidents, theft, and damage to vehicles. Traditionally, many transport operators have struggled to afford insurance, leaving them vulnerable to financial losses in the event of an accident or mishap.
SACCOs have stepped in by offering group insurance plans for their members. These plans often include coverage for accidents, theft, and medical expenses, which provides a safety net for both operators and their passengers. SACCOs also provide life insurance options, ensuring that the families of operators are taken care of in case of fatal accidents. This initiative not only protects the livelihoods of operators but also helps build trust and confidence in the transport sector as a whole.
Supporting Regional Integration and Expansion
SACCOs are also playing a key role in expanding the reach of the transport sector by supporting regional integration. Many SACCOs have facilitated the establishment of transport routes that connect different regions, including rural areas that were previously underserved. By providing the necessary financing, insurance, and operational support, SACCOs have enabled operators to expand their services, improving accessibility and connectivity between urban and rural areas.
This expanded reach has had positive economic effects, enabling better movement of goods and people across the country. It has also contributed to regional integration by connecting Kenya to neighboring countries, enhancing cross-border trade and cooperation within the East African region. As more SACCOs become involved in cross-border transport operations, the industry’s role in promoting regional development and economic growth continues to grow.
Enhancing the Welfare of Transport Workers
Beyond financial and operational support, SACCOs have also played a significant role in improving the welfare of transport workers. Many SACCOs provide their members with access to healthcare, education loans, and retirement savings plans. These benefits help transport workers improve their quality of life and secure their financial future.
By offering these social services, SACCOs have made it easier for transport workers to meet their personal and family needs, which in turn contributes to greater job satisfaction and loyalty to the industry. Additionally, the establishment of SACCOs has fostered a sense of community and solidarity among transport workers, allowing them to collaborate and support each other in ways that were previously difficult within a fragmented industry.
Author: Andrew Walyaula
Andrew Walyaula is a seasoned multimedia journalist. waliaulaandrew0@gmail.com
