Often, volcanic lava is usually full of precious materials. Sadly though, during the eruptions, there is a lot of disruptions and livelihoods are affected the effect thereof creating a new natural environment leading to new opportunities and challenges. The Covid-19 pandemic has had the same effect on the our social economic wellbeing even creating a new business environment. The pain and agony created are of unforetold magnitude. Albeit, there are many uncovered opportunities due to the new business environment.
It has been said that one can never find a new haven by the use of an old map, so there is need to rethink your business models to fit the new business ecosystem.
Savings and Credit Co-operative Societies (SACCOs) have remained an integral sector and investment vehicle among Kenyans. It is a rarity to find a person who does not belong to a SACCO. According to the Sacco Societies Regulatory Authority, SACCOs continued to maintain profitability and resilience in 2020 and during the pandemic.
In Kenya, the SACCO sector holds to over a combined deposit of Ksh 431.46 billion, this is close to 15% of the total annual budget, meaning, SACCOs are an integral part of the economic enablers offering financial deepening across the societal divide.
The advent of Covid 19 frightened majority of the sectors in the economy including the SACCOs, however, through robust measures initiated by both the SACCO management and the sector experts among them SASRA, SACCOs have been able to bounce back. This entailed rethinking their business model ranging from modification to product offering, investment in ICT, and clientele retention through service excellence and giving back to the community among others.
Business Process Re-engineering (BPR)
Previously, SACCOs have spent huge funds on members physical meetings, with Covid everything transitioned to virtual platforms which has had a major impact in cost reduction hence improving on the overall SACCOs profitability: Silver Lining
Majority of the SACCOs restructured their business models to help them navigate through the challenges brought forth by the COVID-19. In light of what the pandemic has caused, that is loss of businesses and reduction in income sources, majority of the SACCO products were not selling as anticipated. Consequently, some SACCOs came up with revised products, with flexible repayment rates and periods, acceptance of a wide range of private instruments as collateral and automation of the appraisal process making it more lenient.
The adoption of virtual interactions between members as well as other stakeholders had also a noticeable yet commendable outcome with a bulk of expenditures.
- Dividend payment –SACCOs have been able to pay dividends to their members based on the share capital held by each making it possible for members to earn extra incomes and encourage them to continue saving. This is after a directive was given by SASRA in March 2020 after members stated withdrawing from the SACCOs.
- Re-evaluation of Business Terms –The Societies had to re-evaluate the terms and conditions of the loan products offered to the members on an individual basis. Members had to prove that they were affected by the pandemic and their repayment plans and sources of income had been distorted. This was made possible by SASRA’s measures regarding loan restructuring
- Meetings-Through technology, SACCOs were able to reach out to their members through their social media pages and planned meetings. The majority of the Sacco held their Annual General and Annual Delegates Meetings and other committee meetings virtually.
- Mobile Banking– The majority of the SACCOs have collaborated with critical service providers to enhance mobile banking for example the use of plastic cards, online platforms, and applications in making payments and in the repayment of loans.
- Use USSD -Introduction of the USSD codes to aid members in remote regions that have no access to the internet or social platforms.
2) Working Remotely –
Major operations, which seemed impossible carried out remotely took a sharp turn when the possibility of working from home was introduced. This lead to the cutting of costs relating to administration and governance. SACCOs, just like any other SMEs managed to save and maximize customer satisfaction.
It is wise to always keep track of your financial position. During this pandemic, other affiliated bodies of SACCOs in Kenya through their official communication pages, intensified online training in matters of liquidity to safeguard SACCOs with liquidity challenges. Among other safeguards, SACCOs were required to fill liquidity reports on a daily basis and channel them to the said governing bodies. This aided the mobilization of the fund pool-Central Finance Fund (CFF) to allow the SACCOs with excess liquidity to deposit their excess funds.
The SACCOs used the opportunity presented by the pandemic to remind the general public of their existence by carrying out CSR activities. This involved lending to support social welfare activities at low or no interest rates. Such activities presented a marketing opportunity for some of the SACCOs by identifying with the potential clients at their hour of need and hence improving on their brands. Among other activities, some SACCOs offered scholarships, donations of sanitizers, soap, and water tanks e.t.c.
The marketing teams of some SACCOs took the opportunity of the pandemic to engage their clients with surveys and goodwill messages. In order to enhance operations, SACCOs took up the initiative of conducting online surveys using the digital public survey tools that help in assessing the level of customer satisfaction while providing instant feedback and assuring the security of the data pertaining to the members of the Sacco. This has helped streamline operations in major departments and keep members engaged on SACCOs’ issues.
For any business to thrive, it must have a continuous introspect of its business model, as the business landscape is discontinuous.