For decades, Savings and Credit Cooperative Organizations (SACCOs) have played a crucial role in financial inclusion across Kenya. They’ve enabled millions to access credit, grow their savings, and build community-based wealth. Yet, as the financial landscape evolves, one challenge becomes increasingly clear: SACCOs are struggling to attract young people and informal groups.
This gap threatens the long-term sustainability of SACCOs. Why is this happening, and how can it be addressed?
1. SACCOs Are Seen as Outdated by the Youth
Kenya’s youth, tech-savvy, mobile-first, and convenience-driven, often view SACCOs as old-fashioned. Many associate them with manual paperwork, long approval processes, and rigid structures. In contrast, fintech apps and digital lending platforms offer instant loans, slick user experiences, and 24/7 access via smartphones.
Perception is powerful. If SACCOs don’t innovate their image and service delivery, they risk becoming irrelevant to the next generation.
2. Limited Digital Access and User Experience
While many SACCOs are beginning to digitize, their platforms often lag in usability and accessibility. Some still rely on in-person processes or lack mobile apps that resonate with younger users or informal groups.
- Poor onboarding experiences
- No real-time services
- Lack of integration with mobile money ecosystems like M-Pesa
- All these lead potential members to seek faster alternatives.
3. Lack of Tailored Products for Youth and Informal Groups
Young people and informal workers have different financial behaviors and needs. They often:
- Earn irregular income
- Avoid long-term commitments
- Seek small, flexible loans
- Value savings tools that support short-term goals
Most SACCOs, however, still operate on models designed for salaried members or formal businesses. This mismatch alienates informal traders, gig workers, boda boda operators, student entrepreneurs, etc.
4. Weak Branding and Communication Strategies
SACCOs often do little to market themselves to youth or informal groups. They lack:
- Strong social media presence
- Engaging financial literacy content
- Community outreach in youth spaces (universities, TikTok, YouTube, etc.)
In comparison, fintechs and digital loan apps aggressively target young users with clever campaigns, influencer marketing, and localized language.
5. Trust and Governance Issues
Several SACCOs have faced scandals involving mismanagement, poor governance, or delayed payouts. Such cases damage trust, especially for younger people, who already have many options and low tolerance for risk.
Youth want transparency, instant access to account info, and platforms that feel safe. Without strong governance structures and transparency tools (like digital dashboards), SACCOs lose out.
6. Inflexible Membership Models
Joining a SACCO often requires:
- Physical registration
- Group introductions or referrals
- Minimum contributions
This process can be discouraging for youth or informal groups who prefer frictionless onboarding and autonomy.
💡 Today’s users expect to register and access services in minutes, not weeks.
What SACCOs Can Do to Win Over Youth and Informal Groups
1. Go Fully Digital Mobile-First, Offline-Ready
- Launch mobile apps or USSD platforms that offer intuitive, instant access
- Enable account opening, savings, loan applications, and statements via mobile
- Build offline-first tech for those in low-connectivity areas
2. Develop Youth-Focused Products
- Micro-loans with flexible repayment
- Targeted savings goals (e.g. education, side hustles, tech gadgets)
- Digital wallets that integrate with M-Pesa
3. Strengthen Branding and Digital Outreach
- Be active on social platforms, especially where the youth are
- Partner with youth influencers and content creators
- Run financial literacy programs via social media, podcasts, or YouTube
4. Make Governance Transparent and Tech-Driven
- Use smart dashboards for transparency
- Give members access to real-time financials
- Emphasize member-centric policies and accountability
5. Simplify Onboarding
- Allow 100% digital registration
- Remove unnecessary paperwork
- Create pathways for informal groups to join as digital chamas
🚀 The Opportunity Ahead
Kenya’s youth population is massive. Over 75% of the population is under 35. Similarly, the informal sector employs over 80% of the workforce. These two groups aren’t just potential SACCO members; they are the future of cooperative finance.
The SACCOs that take bold steps to digitize, listen, and adapt will thrive. Those that cling to legacy systems risk being left behind.
At Fibo360, we’re helping SACCOs bridge this gap, with smart, member-first digital solutions designed for real people, real needs, and real growth.