Saccos told to adopt new technology to survive competition

By , May 19, 2025

Savings and Credit Cooperative Organisations (Saccos) have been urged to intensify investments in product development and adoption of new technology to endure competition, especially from commercial banks.

Cooperative Bank of Kenya vice chairman Macloud Malonza observed that commercial banks have mounted cut-throat competition through intensive product development targeting all the depositors and especially those in formal employment. “We have witnessed a thorough business rivalry from the big boys in the money market, a trend putting more pressure on the financial cooperatives. The commercial banks, owing to their modern and high expertise and increased liquidity, are able to penetrate to more business segments,” he said.

Malonza explained that the cutthroat competition has contributed to the market cake shrinking and to the disadvantage of the credit unions. “Therefore, as the cooperative movement leaders, we need to fast-track new approaches based on increasing investment in modern technology, product development and enhancing our customer approach,” he added.

Malonza made the remarks during a leaders’ meeting and launch of Ushirika activities at Kenya Bankers Hall. The theme of this year’s Ushirika celebrations is “Cooperatives driving inclusive and sustainable solutions for a better world.”

He advised the leadership of Saccos to widen their scope of investments, especially targeting information and Communications Technology (ICT) as well as avoiding gaps that can lead to poor governance. Further he said the cooperatives need to spend more on research and development and hence fully understand the changing market dynamics and enhance capacity building to deepen the market. 

Malonza who is also the chairman of Cooperative Alliance of Kenya (CAK) however acknowledged the current growth of between 10 and 15 per cent annually of the cooperative movement saying the trend confirms the high rate of untapped market segments in terms of financial deepening.

Commissioner for Cooperatives David Obonyo hailed the contribution of the cooperative movement to the country’s economic growth, especially in rural wealth creation.  

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