Automation of SACCOs - FSD Kenya

III) Governance
AUTOMATION OF SACCOS: ASSESSMENT OF POTENTIAL SOLUTIONS • 53
ID opportunity Benefit obstacle Change requirement System requirement
1 Record details when a loan
application rejected by the
audit department or junior
loan officers is approved by
senior executives and hold
them accountable for the
performance of that loan.
2 Enforce policy compliance
by restricting execution in
the system unless policy is
fulfilled and/or capture and
report on any deviation. It
might be preferable for certain
processes to use the system to
recommend rather than restrict
in order to benefit from human
judgement in cases where the
system would be too rigid.
To prevent abuse and enable
evaluation deviation from policy
needs to be monitored.
IV) Increase productivity
Increased compliance with
policy and formalised business
processes and workflow that is
easier to monitor and manage.
Increased understanding of
drivers of delinquency and
ability to prevent it.
Increased job satisfaction and
productivity as the relationship
between various stages in
the loan issuing process and
the individuals’ roles are
documented and feedback can
be provided.
Increased policy compliance
and understanding of where
the policy is inadequate.
Avoids that the user enters data
to the system as a formality
without any intention of
relying on the system’s ability
to support appraisal of the
loan application. This results
in double work and poor
system and organisational
effectiveness and integrity.
Each individual,
including senior
executives, need
to accept that their
decisions and the
impact on the loan
portfolio’s performance
are scrutinised publicly
within the SACCO.
Agree on loan appraisal
criteria, process design
and appropriate
incentives.
Implement a new report
and evaluation process.
Create incentives to reward
positive behaviour and
reprimands for breach of
policy.
Identify appraisal criteria,
document processes, and
design incentive scheme.
Report production and
distribution.
Database acting as a data
warehouse.
Flexible to accommodate
different frameworks
and criteria for loan
appraisal and approval.
Comprehensive to allow
for a large number of
outcomes depending on
fulfilment of criteria.
ID opportunity Benefit obstacle Change requirement System requirement
1 Review the role of BOSA,
internal audit, the management
and the board including
relevant sub-committees to
ensure that they combine and
make up a logical organisation,
effective in managing
delinquency.
Reduce redundancy within the
organisation.
Create transparency to areas of
responsibility.
Enable measurement of
performance.
A clear view of the
operating model and
business processes are
required.
Fear of impact on job
security.
It needs to be clear who is
processing, who manages
operations, who audits
and who is ultimately
responsible to the
shareholders.
The monitoring functions
need to be independent
of the operational to avoid
conflicts of interest.
The system needs to
be tailored in terms of
providing a workflow and
screens that support the
business processes and
organisational structure.