Why Rural SACCOS are more successful than Rural Cooperatives.
I think rural SACCOS are more commercially inclined than their SACCOS which unfortunately in many cases seem to be stuck as being social enterprises, who don’t seem to grasp well concepts of ‘doing business’. Rural cooperatives are have a lot of the yesteryear illusions of state subsidies, funding and cheap capital, which unfortunately it is no more. The rural SACCOS on the hand, being commercially driven are innovative to create business for the benefit of their members. They consider their members, equally as investors too who want to earn profit. As a result they have adapted and developed business networks outside the traditional cooperative movement which they tap into, and leverage more resources for their members.
Historically, rural cooperatives have had an external hand, be it in the form of state/government subsidy ( even if at district or local level), they have had political inclinations at times and also their focus on service combine to make them less business oriented. The SACCOS, always have this dedicated group of a few people who have a sense of a customer friendliness to grow their business. Across Africa, the financial requirements of the people are not homogeneous and often vary according to the local conditions and circumstances. The rural SACCOs succeed here through customization of credit packages, which they base also on the nature of activities the credit is to support.
The rural SACCOS that are successful also dues to necessity divert into different financial products, including savings mobilization, short, medium and long term loans, loans in Kind and even transfer services.
The rural cooperatives, which have are mainly single commodity based, tend to operate ‘‘seasonally’’. Their activities peak at times of say harvesting and marketing and getting inputs. They get accustomed to this cycle and have no room for innovation or adaptability. They cease to be a model for doing business. Vital part of any cooperative organization is its members and their active participation in and loyalty to the cooperative is integral for its success. With a season to season patronage of the service of the cooperative this can be tested to the limit. It can affect their attitude towards the cooperative negatively.
Why Rural SACCOS are more successful than Rural Cooperatives.
I think rural SACCOS are more commercially inclined than their SACCOS which unfortunately in many cases seem to be stuck as being social enterprises, who don’t seem to grasp well concepts of ‘doing business’. Rural cooperatives are have a lot of the yesteryear illusions of state subsidies, funding and cheap capital, which unfortunately it is no more. The rural SACCOS on the hand, being commercially driven are innovative to create business for the benefit of their members. They consider their members, equally as investors too who want to earn profit. As a result they have adapted and developed business networks outside the traditional cooperative movement which they tap into, and leverage more resources for their members.
Historically, rural cooperatives have had an external hand, be it in the form of state/government subsidy ( even if at district or local level), they have had political inclinations at times and also their focus on service combine to make them less business oriented. The SACCOS, always have this dedicated group of a few people who have a sense of a customer friendliness to grow their business. Across Africa, the financial requirements of the people are not homogeneous and often vary according to the local conditions and circumstances. The rural SACCOs succeed here through customization of credit packages, which they base also on the nature of activities the credit is to support.
The rural SACCOS that are successful also dues to necessity divert into different financial products, including savings mobilization, short, medium and long term loans, loans in Kind and even transfer services.
The rural cooperatives, which have are mainly single commodity based, tend to operate ‘‘seasonally’’. Their activities peak at times of say harvesting and marketing and getting inputs. They get accustomed to this cycle and have no room for innovation or adaptability. They cease to be a model for doing business. Vital part of any cooperative organization is its members and their active participation in and loyalty to the cooperative is integral for its success. With a season to season patronage of the service of the cooperative this can be tested to the limit. It can affect their attitude towards the cooperative negatively.