Saccos and Banks Compete in Kenya's Financial Sector
What happened
In Kenya, Savings and Credit Cooperative Organizations (Saccos) are competing with banks in the financial market. Saccos possess a large base of loyal members who save consistently, which represents a cheap source of capital. The competitive pressure stems from banks embracing digital platforms, allowing for quick loan applications via mobile phone apps. Saccos, meanwhile, are struggling with slow processes, such as requiring multiple guarantors and committee approvals.
From standardmedia.co.ke
Why it matters
The competitive landscape is being challenged by the speed and accessibility of mobile lending. Furthermore, governance issues within Saccos are noted, where boards are sometimes elected based on popularity or favors rather than financial competence. This structural shift impacts how financial services are delivered in the country.
From standardmedia.co.ke
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