Automation of SACCOs - FSD Kenya

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30 • AUTOMATION OF SACCOS: ASSESSMENT OF POTENTIAL SOLUTIONS the progress at these two SACCOs. As for the remaining vendors, the project team could only rely on the information provided by them. Amtech claimed they had connected Chepsol SACCO’s two branches. Fern claimed to have experience with linking up multiple branches of the same institution via a low-bandwidth connection. Neptune stated they had successfully connected five and seven branches of Embu Farmers and Necco FOSA SACCO, respectively, and Temenos claimed they have completed multi-branch installations at Faulu Kenya and Kenya Women’s Finance Trust. However, this information needs to be confirmed. Cost estimates To get an understanding of the price levels, the project team had also requested the vendors to provide a cost estimate for two standard SACCOs. The following information about the standard SACCOs was shared: Tea farmers-based SACCO, Kenya Tea Development Agency as sole employer, 3 branches, 20 system users, 15000 members Urban SACCO with diverse membership, employees from governmental and private organisations as well as teachers and traders, 8 branches, 100 system users, 60000 members Table 6: Cost estimates for tea farmers-based SACCo (KSh) Craft Silicon Amtech Fintech Fern neptune Temenos Licence 4,500,000 2,000,000 5,800,000 10,700,000 7,130,000 Implementation 240,000 2,025,000 2,600,000 2-3,000,000 15,300,000 Training 150,000 1,000,000 2,960,000 Annual maintenance 18% 15% 20% 15% 18% Total 4,740,000 4,175,000 8,400,000 14-15,000,000 25,390,000 Table 7: Cost estimates urban SACCo (KSh) Craft Silicon Amtech Fintech Fern neptune Temenos Licence 12,000,000 2,000,000 12,000,000 20,300,000 26,730,000 Implementation 240,000 3,712,500 3,450,000 1-4,000,000 15,300,000 Training 750,000 3,100,000 2,960,000 The vendors were asked to estimate the total cost broken down into licence, implementation, training, and annual maintenance cost. Obviously, the vendors did not have sufficient information to quote an exact price as that would require a comprehensive case by case study of business requirements as well as a gap analysis. However, the cost estimates can serve as rough indication and help to understand in which price category a solution falls. The quoted prices are each exclusive of tax. Fern never submitted cost estimates for the two standard SACCOs but proposed to have a joint automation of Kenyan SACCOs. An enterprise licence to be shared by all participating SACCOs would amount to US dollar (USD) 250,000. An individual SACCO would additionally pay USD 2,200 for their server licence and USD 1,350 per concurrent user licence. Services such as customisation, implementation, configuration, training, user acceptance testing, etc. would be charged at between USD 450 and 850 per day plus expenses. Neptune offered the alternative of an ASP model. The SACCOs would in this case not incur a licence cost. Instead, they would pay a joining fee of Kshs 350,000, Kshs 1.4 million for the initial deployment, and Kshs 350,000 for training. This would reduce the initial investment to just above 2 million Kenyan shilling. Subsequently, the SACCOs would need to pay monthly transaction Annual maintenance 18% 15% 20% 15% 18% Total 12,240,000 6,462,500 15,450,000 24-28,000,000 44,990,000
fees according to the size of their membership, ranging from Kshs 15 to 30 per active member. Taking this information into account, the project team estimated the cost for the two standard SACCOs to amount to approximately 6.42 million and 12.9 million Kenyan shilling in the first year. Temenos offered the alternative of engaging their partner Softgen in project management, implementation, and training. This would reduce total cost by approximately 20% for the tea farmers-based SACCO and 10% for urban SACCO, respectively. The outcome of the project is a recommendation to deposit taking SACCOs describing viable applications and practical advice how to implement them. As the system is regarded as an enabler rather than having a purpose of its own the analysis will look at all key options available to the SACCOs to obtain the desired outcome. AUTOMATION OF SACCOS: ASSESSMENT OF POTENTIAL SOLUTIONS • 31 The recommendation initially outlines key constraints and success factors, labelled considerations, which a SACCO need to address to provide a foundation for the automation. It then analyses the strategic options available to the SACCO and which specific applications are suitable for each option. Finally a roadmap is provided which organise the identified tasks of the automation in sequence. Guiding principles for the development of the recommendation is that it is heavily fact based, focused on achieving compliance with the imminent regulatory regime to follow the SACCO Societies Act 2008 and that it only includes solutions that are currently available in Kenya. The information gathered from the SACCO visits will form the basis for each part of the recommendation and the vendor selection process. This will be complemented by the conclusions from previous projects as well as documented best practice for credit union and microfinance organisations.
Page 1 and 2: AutomAtion oF SACCoS ASSeSSment oF
Page 3 and 4: table of Contents Tables and Figure
Page 5 and 6: list of Abbreviations ASP Applicati
Page 7 and 8: exeCutive SummAry Financial Sector
Page 9 and 10: Chapter 1 introDuCtion 1.1 ConTEXT
Page 11 and 12: Chapter 2 projeCt methoDology 2.1 r
Page 13 and 14: The purpose of the visits was to sp
Page 15 and 16: The fact that the individual lists
Page 17 and 18: A manual of the solution needed to
Page 19 and 20: studies, which have been focused on
Page 21 and 22: for management information purposes
Page 23 and 24: yield on member share capital. The
Page 25 and 26: Thirdly the project team as observe
Page 27 and 28: coordinating their acquisition and
Page 29 and 30: Level 1 Level 2 Description AUTOMAT
Page 31 and 32: Level 1 Level 2 Description AUTOMAT
Page 33 and 34: Chapter 5 AutomAtion Solution ASSeS
Page 35 and 36: they would most probably have been
Page 37: Accounting and finance AUTOMATION O
Page 41 and 42: social factors. The first would be
Page 43 and 44: the system implementation there wil
Page 45 and 46: In order to evaluate the identified
Page 47 and 48: the functionality Orbit offers by d
Page 49 and 50: ecommendation: To conclude Amtech
Page 51 and 52: 5. Orbit (Neptune) Fulfilment of re
Page 53 and 54: Plan the project This phase is esse
Page 55 and 56: 3. Managing stakeholder participati
Page 57 and 58: option is the acquisition of SACCO-
Page 59 and 60: I) Increase automation AUTOMATION O
Page 61 and 62: III) Governance AUTOMATION OF SACCO
Page 63 and 64: AUTOMATION OF SACCOS: ASSESSMENT OF
Page 71 and 72: Customer data management All detail
Page 73 and 74: Risk management The system provides
Page 77 and 78: 5. orBIT (nEPTunE) AUTOMATION OF SA
Page 81 and 82: 6. T24 MCB (TEMEnoS) AUTOMATION OF
Page 85 and 86: noteS AUTOMATION OF SACCOS: ASSESSM
Page 88:
FSD Kenya Financial Sector Deepenin
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Automation of SACCOs - FSD Kenya

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