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Challenges in Realizing Fully Digitized Rural-Based Saccos

3 min read

Co-operatives Recovery: Saccos Leverage on Digital Transformation

By Carol Machira

Some Sacco across the country have adopted technology in almost all areas of operations, from upgraded security systems to fight cyber crimes to online and mobile banking services for their members.  By leveraging on technology, Saccos are able to access a large market and information, causing them to grow tremendously and gain popularity. Unfortunately, understanding the importance of the adoption of new technologies in every aspect of business is still a new concept to some Saccos especially the ones operating in the rural areas.

Some shy away from adopting the technology owing to the heavy financial implication it will have on the Society. Rural communities tend to experience low economic diversification, shrinking and relatively low-skilled labour force with lower levels of education. These among other factors have hindered rural-based Saccos, making them miss out on great opportunities that come with digitization.  


Saccos could be willing to go digital but some rural areas in Kenya have no access to power which limits the telecommunications and internet companies to set up mobile networks and internet connections respectively. Statistics from the World Bank show that only 17 percent of the rural population has access to internet. This means that technologies such as mobile and online banking is almost impossible to implement. For the regions fortunate enough to have internet, the network coverage is limited. Despite 4G becoming the most common mobile connection globally and reaching 57 percent of the Kenyan population, 77 percent of it being the major town, majority of the rural areas are not covered.    

Digital literacy

The use of digital technologies requires basic, special knowledge and skills.  Some rural-based Saccos have employees who lack basic skills in using technologies to either find, assess, create, or communicate information. This may resist technology changes which sometimes makes the management choose not to implement new ways and technology, out of fear that employees will be overwhelmed. In addition, some of the rural-based members lack knowledge and skills in using technology like smartphones, computers, social platforms, and software.  

Age Demography

According to a World Council of Credit Unions (WOCCU) 2015 Report, the average age of credit union members in most countries is mid-to-late 40s. Unfortunately, when it comes to digital skills, elderly people are more disadvantaged due to the fact that many are not confident in their own ability to learn about and properly use electronic devices.

Income level

Most rural-based Sacco members are low-income earners who taking care of basic needs is their priority; with their conservative lifestyle, it is hard for them to think about changes and evolutions in economic activities.  According to research, income is the main reason for not being willing to use information technology. It is therefore very hard for the Saccos’ board and management team to mobilize such members to embrace technology, both in making transactions and even in their daily lives.

Culture and Traditions

Some villagers may have fears of damaging their culture from accepting technology implementation. Due to scattered rural settlements and lack of a proper communication path, some regions of the country have little contact with the outside world; this has led to the formation of specific cultural values associated with rural settlements, mixed with the beliefs, values, and superstitions. This poses a great challenge to Saccos operating in those kinds of regions that attempt to introduce new ways of doing business other than the ones the traditional people are used to.   

What should be done

 All Saccos should have a structured system to deliver appropriate training to all employees who need to be trained on the use and need of technology. The Saccos need to come up with ways of implementing change and understand the acceptance process by the employees, more so the factors that are essential in making the process effective. It is upon the management to effectively communicate to the employees the benefits of the adoption of the different technologies.