Why your SACCO savings are at risk
Recent surveys reveal that more than half of Kenya’s Savings and Credit Cooperative Organizations (SACCOs) lack effective data recovery plans, despite the sector experiencing significant cyberattack attempts during the COVID-19 pandemic.
The survey, which covered 111 SACCOs across the country, highlights serious vulnerabilities in the IT systems of these organizations, which collectively manage over a trillion shillings in assets and member savings.
In October 2021, SACCOs were reportedly losing up to KSh6.23 million per month, or KSh208,000 daily, due to issues with software vendors. Despite an increase in cybersecurity budgets over the past three years, many SACCO boards have not prioritized cybersecurity adequately. Some SACCOs outsource IT protection to inadequately vetted consulting firms, jeopardizing member savings and personal information.
The latest Serianu SACCO cybersecurity report (2020) reveals that 42% of SACCOs lack monitoring and alerting systems, and 16% only track vendor activities when problems arise.
As digital transformation accelerates, with banks like Equity and KCB reporting high rates of digital transactions, SACCOs are pressured to adapt. However, many are struggling to keep up, with only a few offering mobile loan services. Dr. David Cracknell of First Principles Consulting notes that while some large SACCOs have invested in new systems, most are still lagging behind.
Martin Mwangi, lead cybersecurity consultant at Serianu, warns that inadequate cybersecurity controls are enabling cybercriminals to compromise SACCO networks. The survey suggests that SACCOs should invest in antivirus software, firewalls, and email security gateways to detect and prevent malware attacks.
Cynthia Wandia, CEO and co-founder of Kwara, encourages SACCOs to embrace cloud computing for cost-effective and secure data management. She emphasizes that SACCOs can benefit greatly from digital transformation, similar to banks and insurance providers.
As of December 2020, 175 deposit-taking SACCOs managed assets worth KSh627.68 billion and deposits of KSh431.46 billion, disbursing KSh474.77 billion in loans. These SACCOs serve 4.1 million active members and 1.37 million dormant members.
Author: Andrew Walyaula
Andrew Walyaula is a seasoned multimedia journalist. waliaulaandrew0@gmail.com
