Kenya has posted 50 per cent increase in financial inclusion in the last 10 years, riding on a bullish information technology regime.
Industry, Trade and Co-operatives,Cabinet secretary Adan Mohamed says this growth has largely been achieved through mobile money solutions, which have made access to money and loans fast, secure and more affordable.
He said use of appropriate social media platforms and interactive websites to respond to members’ needs, advertising financial services and member satisfaction are also critical for survival in the digital age.
Savings and Credit Co-operative (saccos), he disclosed, have particularly contributed immensely to the financial inclusion process.
“However, to further increase their role in financial inclusion Saccos should leverage on information technology and mobile payments so as to bring additional people into the formal financial system,” the CS said.
Mohamed made the remarks in a speech read on his behalf by Principal Secretary, State Department for Co-operatives Ali Noor during the just-concluded Annual Sacco Leader’s Convention in Mombasa.
“Kenya has achieved a 50 per cent increase in financial inclusion within the last 10 years, according to 2016 FinAcess Household Survey which is a critical enabler for poverty reduction and inclusive growth. It helps poor households improve their lives and spurs economic activity,” Mohamed said.
The CS urged saccos, especially housing co-operatives to take advantage of the mortgage tax relief and the 15 per cent real estate developers corporate tax to contribute to the realisation of 500,000 low-cost housing under President Uhuru Kenyatta’s “Big Four” development agenda.
The President has identified manufacturing, affordable housing, healthcare and food security as his areas of focus for the next five years. According to Mohamed, the tax incentives were extended to co-operatives by the government through the Miscellaneous Amendment Bill last year.
This follows Parliament’s commitment to providing legal policies through Sacco Societies Amendment Bill of 2018 to eradicate economic barriers encountered by the societies.
Available statistics indicate about 17.4 per cent of the population are still excluded especially those in the lower segments from the formal financial services.
This indicates that a sizeable number of Kenyans are yet to be integrated into formal financial services thereby creating a huge opportunity for the sacco sub- sector to bridge this gap.
Saccos have grown to be a force to reckon with in the country’s financial services sector. The perception of Saccos has transformed from “harambee” movements to institutions with portfolios running into billions of shillings.
Kenya’s Vision 2030 recognises sacco societies as a platform for increasing financial access to mobilise savings for investments in business and personal development.
Saccos continue to close the capital resources divide by providing accessible credit for entrepreneurship and innovation that often do not meet the criteria for loans at regular finance institutions.