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Finance and Investment

Facilities Management: The Untapped Function that can Catalyze SACCO Transformation and Drive Growth



By Robert Kanyua

We are witnessing a trend towards digitization in the financial services world. This digitization is ushering a new threat for the brick-and-mortar branch as financial services are increasingly offered via digital platforms. Will physical facilities continue playing a valuable role or will they die away as financial services firms transform for the digital age? How can SACCOs transform their facilities to drive growth?

A Changing Business Model

The built environment has played an integral role in capital generation, productivity and the success of

organizations. In the past, brick-and-mortar branches have been the physical manifestation of financial services firms. They have depicted strength, stability and security. Today, whereas the fundamentals of Savings and Investment have not changed, the nature of how SACCO members access services is evolving – from physical to digital formats.

Organizations are seeking out new ways to differentiate themselves. Digitization as an emerging trend is gaining traction in the financial services industry. As a matter of fact, there is now a fully licensed digital bank in Kenya today.

SACCOs have not been left behind and many are now offering a plethora of services via digital formats. SACCO members are able to virtually apply for membership, request for loans and make repayments without any physical human interaction. Questions now arise as to how long the physical branch will remain relevant and whether increased digitization of SACCO services will eliminate it.

The Significance of Facilities in the SACCO Sector

In the SACCO space, the role of facilities (e.g. banking halls and ATMs) is pivotal in meeting various needs. First, the typical SACCO customer is fairly traditional, has limited digital savviness and prefers in-person interactions. Second, there are members who are aspirational and sophisticated who like to enjoy the services as offered in the mainstream banking arena. Both of these need to be accommodated.

Given the need for omnichannel experiences to support both client profiles, facilities management will remain a critical function for most SACCOs in the foreseeable future. Accordingly, facilities management also becomes the critical organizational function that can be leveraged to help SACCOs transform for the future as well as compete in the current environment.

How Facilities Impact Your Brand and Bottom Line

Whether you realize it or not, your facilities and how well you manage them, impact on your brand and bottom line. Besides building trust, your facilities play are the physical representation of your brand, a marketing tool; what customers relate to and the place to provide customer service.

In this regard, the facilities managed by SACCOs, e.g. offices, banking halls, ATMs and other real estate investments must be managed well in order to make them a place where people want to visit.

Facilities management as a function should evolve from being a pure service provision function to a strategic enabler. Likewise, Facilities management competencies must evolve and give way to facilities management excellence.

Facilities Management as a Differentiator

Facilities management is the often-ignored function with the potential to catalyze SACCO transformation and drive growth. Those who have understood the potential of leveraging facilities for growth, have created an enduring advantage that competitors only struggle to replicate.

There is a clear payoff with benefits ranging from cost reduction to enhancing service provision and customer experience. A notable success story is Unaitas SACCO that was able to stand out in a highly competitive market and position itself for growth by upgrading its facilities including branch and ATM network. Their growth results speak for themselves.

Realizing the value of Facilities Management, Not a Walk in the Park

Even as the world becomes attuned to digitization, investing on hidden optimization opportunities can be difficult as organizations are complex systems with competing priorities.

Today, more than ever before, it is challenging to manage facilities due to high costs, rising customer expectations and other complexities that include high human traffic, the need to make an impression; multiple teams and core needs such as safety, security and maintenance.

More often than not, when organizations are pressured, management focus on the core functions and relegate facilities management to the bottom. In addition, when faced with ongoing pressure to reduce operating costs, organizations tend to save on facilities management expenditure with little reflection on the long-term repercussions.

Importantly, even though organizations are complex systems we should remember that a complex system is as strong as its weakest link. The opportunity for every SACCO lies in turning its facilities e.g. its branches from purely being cost centers into asset.

SACCOs need to rethink the value they place on Facilities Management. The function must evolve from a being a tactical, service-oriented activity to a strategic role that is critical to achieving business outcomes.

It also helps to have visionary leadership who with the resolve to confront the existing barriers and go beyond what is considered commonplace. Operating retail branches accounts for a third of the operational expenditure of a typical financial services firm. Given this financial materiality, the facilities management function should remain center stage and a top priority.

Are you getting the most out of your facilities?

To turn your facilities into assets, there must be a heightened focus on good facilities management practices. For this to happen, SACCOs must embrace core facilities management objectives including;

  • Having a Clean & Secure Environment: A good starting point is having clean and secure facilities as an immediate value to members.
  • Embracing Technology: SACCOs must embrace technology and the benefits that tech provides to transform their branches, understand the customer, improve in-branch customer experience e.g. by reducing waiting times. Today, facilities management technology is highly customizable thereby allowing for a cost-effective adoption.
  • Controlling Costs: Balance operational efficiency with customer experience by actively planning for and monitoring your investments in order to get your money’s worth out of the effort. Also, incorporating Sustainability e.g. in terms of energy efficiency can help in keeping your facilities efficient and profitable. 
  • Choosing Right Location: The choice of location must be suitable as it is a way to further engage your members and attract new people to engage with your brand.
  • Enhancing the Banking Hall Format by Infusing Purpose and Functionality: Exceptional customer experience is the route to a long and rewarding customer relationship. For this reason, SACCOs must optimize their branch assets to improve customer experience both for their own sake and for the members benefit.

Transformation and growth are key motivations to embrace modern facilities management practices. SACCOs must interlace the three core elements in Facilities Management – Place, People and Processes to optimize engagement with their existing members, attract new customers and build their brand.

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Finance and Investment

How does a Cooperative arrive at an ideal board of directors’ composition?



By Mary W Kiema

As a group sets out to form an enterprise, their main concern is to meet their common needs through a business model that is suitable for most of them. Their requirements for the association will be formulated depending on the anticipated nature of the business. The form of business will inform the appropriate rules and subsequent regulations required. The interim governing body at this stage will be composed of some of the founder members who will be responsible for setting up the ground rules.

 In Cooperatives, the objects and membership requirements are contained in the bylaws. These by-laws are specific to an individual Cooperative society. A financial Cooperative for example will provide bylaws that attract members who have the capacity to save, borrow and repay promptly.

 A marketing Cooperative will reach out to the producers or developers of the desired products. At this point the most important assignment is to get numbers regardless of their gender or age provided that they can meet the membership conditions. As the Cooperative takes shape and begins to generate the desired results, the focus is directed to other areas of concern a simple scan through the composition of the membership of a number of Cooperative Societies, shows the dominance of the male gender. This is further evident at the board of directors level and in apex bodies. Attention has been drawn to this state of affairs and certain interventions are being explored to address this.

 As a requirement, a Cooperative Society observes the principle of open and voluntary membership. This means a Cooperative can attract members from diverse walks of life. These members have a right to democratically control their enterprise. The implementation of this democratic member control principle sometimes yields results that go against the tenets of inclusion.  The outcome may sometimes generate discussions that are geared towards attaining the desired status. This will only happen for an enterprise that is deliberately aiming at achieving an ideal position in governance. For most, the disparity goes without being attended to until it is pointed out from within or without.

 Since the promulgation of the Constitution of Kenya 2010, the matter of gender balance has continued to elicit a lot of discussion. The constitution being supreme, all other laws including the Cooperative laws are expected to align.

Enterprises that are private and opt for democratic member control grapple with the challenge of balancing between democracy, appropriate representation and inclusivity.  The desire is to not only have all stakeholders sufficiently represented in the decision-making but also to have an effective organ at the top. The growth and complexity of the Cooperative societies have also further complicated the equation. The qualification requirements for board members go beyond one being a member. To qualify for a board position, some Cooperatives require one to have a certain number of shares and amounts in deposits and to have attained a certain level of education or specific professionalism. This may be interpreted as an avenue for eliminating a particular category from leadership.  With all these hurdles, how does a Cooperative arrive at an ideal board of directors’ composition?

This governance challenge is not an easy one to resolve but it may be the missing link towards addressing issues that have remained in the background for a long time.  As the ground is being levelled to bring all players into the fold, some interventions will be required. The absence of youthful members in the movement may be attributed to their inability to ascend to the decision-making table.   The board of directors are drawn from members, therefore, for youth and women to be on the board they must first be found in the membership. With enough numbers, the electoral zones may be created in a manner that will give all eligible members a chance to serve at the top.

Among the interventions evident include the formation of women and youth networks. Some of these networks have developed elaborate programs to equip the participants with an array of leadership skills that are geared at enhancing inclusivity in institutions. The emphasis is on youth and women because they have been seen to have been left behind although these skills are required across the board. The situation is slowly changing with more women taking up jobs at all levels and being able to participate with others in the management of the organization they belong to. The youths are also encouraged to form workers’ Cooperatives where they can contribute their skills as they grow their unique enterprises.

 Apart from achieving the right composition in terms of demographics, the main concerns have lately turned to the effectiveness of the board. Some skills are wanted among the board. It is for this reason that the issue of accommodating independent directors who have specific skills keeps coming up. One step at a time with the right intentions, an ideal situation will be achieved.

 The writer is a consultant on Co-operative Business Model, a member of the Kenya Society of Professional Cooperators and founder of the SACCOprenuers group on Facebook

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SUCCESS STORY: Kenyan SACCOs help Women Turn Entrepreneurial Dreams into Reality



By Linda Karimi

Nancy Kariuki was a licensed pharmacist who wanted something more: she dreamed of becoming an entrepreneur. Eight years into a career in sales for drug companies, at age 40, she finally took the plunge.

 Keenly aware of the challenges women-owned businesses face, Nancy had been saving money over the years, and by 2020 had amassed Sh1 million (approximately $7,300) in start-up capital.

She opened her business, Essos Pharmacy, in the central business district of Kerugoya, a town of 15,000 in central Kenya.

Nancy was successful for two years in establishing and growing the business. But, in 2022, Essos was struggling to meet increased demand caused by the COVID-19 pandemic.  She needed capital and turned to  Fortune  SACCO.  SACCOs, savings and credit cooperatives, are a popular financial services option in Kenya.

Members of SACCOs invest in them or make deposits and can use that value as collateral when borrowing from the institution. They often can borrow more from a SACCO than from a bank and at a lower interest rate.

Fortune SACCO is one of ten SACCOs participating in a USAID-funded World Council of Credit Unions project under the Cooperative Development Program (CDP) called Technology and Innovation for Financial Inclusion (TIFI). The project seeks to enhance the capacity of SACCOs to lend to micro-, small- and medium-sized enterprises through improving credit risk management, streamlining and simplifying the lending process, and increasing the number of quality financial products available to these businesses.

Fortune granted Nancy a loan sufficient to do what she most wanted – create new jobs. She hired a staff of four, after previously relying only on her husband for extra help. She also enrolled her employees in the National Housing Insurance Fund and the National Social Security Fund, which provide them with healthcare, a pension and social protection.

Nancy also used the money she borrowed to upgrade her point-of-sale and inventory system. She now has more visibility over the operations and financial position of the business. The data also enhances her ability to borrow money in the future, and at a lower cost, because she can now provide reliable financial statements to lenders.

Within a year, the business tripled its revenue and now competes with larger pharmaceutical businesses as a key player in the market. Nancy’s success not only contributes to the economic growth of the community but also provides a source of inspiration for other women entrepreneurs in the area.

The USAID/CDP-TIFI project is transformative because it unlocks the potential of SACCOs such as Fortune, improving how they lend to micro-, small- and medium-sized enterprises. SACCOS in turn helps unlock the potential of those businesses, such as Essos Pharmacy, and people like Nancy, who turned her dreams into reality and improved her community in the process. She is a shining example of what can be achieved with the right resources, determination, and support.

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Finance and Investment

KUSCCO and Aqua for All launch program to provide affordable financing to WASH sector through SACCOs



By Linda Karimi

Kenya Union of Savings and Credit Cooperatives (KUSCCO) in partnership with Aqua for All has launched the ‘Maji Nyumbani’ program aimed at providing affordable finance to the water, sanitation and hygiene (WASH) sector through SACCOs. The program targets SACCOs serving low-income and vulnerable persons across the country with financing being channeled to households and community-based micro, small and medium enterprises (MSMEs).

The program will pilot financing in ten deposit-taking SACCOs from Mombasa, Eldoret, Siaya, Baringo, Embu, Kakamega, Nyeri, Meru, Kilifi, and Nakuru Counties. It will also offer technical assistance to develop WASH loan products that respond to the needs of SACCO members and communities. The pilot phase is expected to take 15 months and to disburse 2,250 loans. Expected target results include reaching 12,500 people comprising of 8,250 women and 4,250 men and sustaining 1,250 jobs.

According to George Ototo, Group Managing Director of KUSCCO, the SACCO sector has a potential of between Sh84.9 billion to Sh174 billion to lend towards the WASH sector, but the SACCOs have faced challenges towards achieving this due to lack of institutional capacity to understand WASH lending, perceived high risk of the WASH sector, lack of awareness of the market size opportunity for SACCOs and lack of member awareness of WASH loan products.

“Through the Maji Nyumbani program, we intend to unbundle or separate the WASH component from the existing loan products. This has the potential to catalyse access to water by availing more financing to SACCO members and Micro, Small and Medium Enterprises (MSMEs). We expect 25 MSMEs to be served per SACCO translating to 250 MSMEs for the ten SACCOs,” said Mr. Ototo.

Marlies Batterink, Aqua for All Regional Manager for East Africa, said that the partnership with KUSCCO will allow prioritizing and scaling WASH loans, creating a significant impact by targeting both households and MSMEs.

The partnership has the potential to reach all corners of the country through the extensive SACCO membership base. Increasing access to loans through KUSCCO aligns with their goal to accelerate access to WASH for underserved, remote communities through mobilizing funds for WASH.

Aqua for All is an international foundation operating primarily in Africa and Asia, while KUSCCO is a Union for all SACCOs in Kenya, providing advocacy, advice, and protection against adverse legislation and restrictions. The Union promotes the organization and development of viable SACCOs.

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