How SACCOs benefit from agency banking
In today’s fast-paced world, SACCO members demand services that are easily accessible and available at all times. To meet this need, SACCOs are increasingly turning to alternative channels such as mobile banking solutions, agency banking systems, members’ portals, and ATMs. Here’s how these innovations benefit both SACCOs and their members:
Cost Reduction
Opening and maintaining physical branches can be extremely costly for SACCOs, requiring significant investments in rent, IT infrastructure, utilities, and staffing. By implementing alternative channels like agency banking, SACCOs can dramatically reduce these expenses.
Even if a SACCO has just one physical branch, expanding its reach across the country would be prohibitively expensive. Moreover, most members work from 8 am to 5 pm, which often conflicts with branch operational hours. Providing services through mobile banking or agency banking allows members to access their accounts and conduct transactions anytime, anywhere, eliminating the need for multiple branches and enhancing overall efficiency.
Improved Customer Experience
In the financial service industry, delivering an excellent customer experience is crucial. With countless options available, including neobanks, commercial banks, trust funds, and MFIs, SACCOs need to stand out.
Providing services closer to members and offering a seamless digital banking experience can significantly enhance member satisfaction. When members can easily deposit or withdraw funds without the hassle of long queues, they are more likely to stay loyal and continue investing with the SACCO. This convenience ensures that members feel valued and supported, fostering long-term relationships.
Increased Membership and Market Share
Convenience is a key factor for potential members when choosing a SACCO. According to a recent survey, 80% of members cited convenience as crucial in their decision-making process.
With alternative channels in place, SACCOs can attract more members by offering easy and efficient access to services. Marketing teams can leverage these channels for mass member registration during field campaigns. Successful SACCOs have already seen the benefits of implementing agency banking systems, which make joining and engaging with the SACCO hassle-free.
Increased Revenues
SACCOs generate revenue not only from loan interest but also from transaction fees. By providing convenient transaction methods, such as mobile banking, SACCOs can encourage more frequent member transactions.
The ease and accessibility of these services save members time and money, prompting them to transact more often. As a result, SACCOs see an increase in transaction volumes and, consequently, higher revenue.
Improved Loan Portfolio
A robust loan portfolio is vital for any SACCO’s growth. Higher loan demand means more revenue from interest, benefiting both the SACCO and its members. SACCOs are known for offering better credit terms compared to banks and digital lenders, but they have lagged in convenience and service speed.
However, with platforms like M-SACCO, which offer instant loan features, members can obtain loans in seconds directly from their phones. This eliminates the need for queues and paperwork, matching the convenience provided by digital lenders. Similarly, agency banking allows members to access credit facilities quickly at nearby agents, ensuring they have no reason to seek loans from other lenders.
Author: Andrew Walyaula
Andrew Walyaula is a seasoned multimedia journalist. waliaulaandrew0@gmail.com
