SACCOs urged to integrate ICT, boost efficiency
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.