SACCOs urged to integrate ICT, boost efficiency

SACCO

 

Despite the recent growth in the performance   sheet of the savings and Credit Cooperatives –SACCOs, there is a need to integrate technology to help increase efficiency in serving their clientele.

The SACCOS are seen as vital tools to drive financial inclusion especially banking the unbanked in rural areas, something that has promoted government to put   in much efforts   to boost their capacity.

Accordingto Fin scopeSurvey 2013, “Use of technology    in the SACCOS is important and this will solve some of the challenges like Non Performing Loans,” said Damien Mugabo, Director General, Rwanda Cooperative Agency-RCA

Mugabo says that with the recent linking of the Sacco’s to the credit Reference bureau has played a key role in bringing down the Non-Performing Loans-NPLs   from 10 percent  last year to  7 percent  by the end of the first quarter  of  2014.

Moreover,  most of the  Savings and credit   cooperatives have  not taken up  the initiatives of using  computers to  enter  data of the clients to provide  efficiency in their operations, which  hampers efficient  management.

“We are addressing the challenge of lack of skills   in the management of these Saccos,” he said adding “the use of technology is important to have all these achieved.”

The  SACCOs which  belong   to   Microfinance  sector  have been  crippled with   lack of management ,  ownership  on  the side of members  as well as financial constraints  that  hinder their growth.

But despite this, the sector recorded impressive performance outlook with its liquidity ratio standing at 86.2 percent well above the required minimum of 30 percent 30 percent while the Capital Adequacy Ratio (CAR) stood at31.9 percent the set benchmark of 15 percent.

Whilst its loan  book  grew to  FRW 81.2 billion from FRW 73.5 billion in the first half of 2014 while liquid assets rose from FRW 42.1 billion to FRW 53.4 billion which lead to an increase in the sector’s asset size of 14.5% jumping from FRW 128.7 billion to FRW 147.4 billion.

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