Automation of SACCOs - FSD Kenya

54 • AUTOMATION OF SACCOS: ASSESSMENT OF POTENTIAL SOLUTIONS
ID opportunity Benefit obstacle Change requirement System requirement
2 Use system data to evaluate the
appraisal process, performance
and collections to optimise
the processes and allocation of
workforce.
Reduced delinquency by
optimising the appraisal process
based on understanding of
any connection between
delinquency of a specific
product and the product
characteristics, main type of
borrower and the appraisal
process for that product.
Increased efficiency by
streamlining the appraisal
process by only capturing the
critically relevant information.
Increased efficiency by focusing
resources on the collections
activities that yield the best
results given the effort required.
3 Manage liquidity proactively. Reduced idle cash and other
working capital.
Increased customer satisfaction
by decreasing the risk of not
being able to disburse a loan
due to shortage of funds.
Minimise dependency on shortterm
funds that assumingly
have a higher average cost than
long term debt and potentially
also equity.
Ensure that departments do
not make suboptimal decisions
such as allocating available cash
to low margin products, e.g.
long term loans verses salary
advances.
4 Design the system such that
it supports business processes
and delivery of customer value
from beginning to end and
not such that it is focused on a
specific organisational entity.
By viewing the SACCO as a
combination of processes,
focused on delivering customer
value by providing savings and
credit products, rather than as
departments, each fulfilling
a function, a more cohesive
and focused system design
and implementation can be
achieved. This results in a more
coordinated organisation and
higher productivity.
The statistical relevance
of conclusions
needs to be verified
before changes are
implemented. I.e. if a
relationship between
delinquency and
appraisal is established
it needs to be verified
if the variables are
independent and if there
are any temporary or
random factors that
would invalidate the
conclusions.
A belief that
the ‘quick ratio’
is sufficient is
misleading and
results in foregone
opportunities
to optimise the
business.
The person making
the forecast needs
to have access to
relevant historic
information, future
plans and have
the experience
to understand
and model the
relationship.
Establish a framework
to measure the relevant
aspects (e.g. delinquency)
relative to the variables (e.g.
appraisal factors).
Revise how the system and
management information
support management and
allow for evaluation on an
on-going basis.
Coordinate FOSA and
BOSA.
Determine the value of
forecasting.
Establish forecasting as a
business process.
Not applicable. Requires significant
business process and
organisational design skills
as well as a clear strategy
that all departments are
engaged to deliver.
Capture detailed
information about what
data is collected to
support appraisal, how
loan and collections
officers’ time is spent,
which collections
activities are taken and
what the status and
outcome is.
Support a framework
to statistically analyse
this information.
Consolidated
information that
can be exported to
a modelling tool
(probably manually
built in Excel).
Requires a flexible
system that can be
designed to support
the business process.
The system must
have a fully integrated
backend (database)
and allow for a
workflow independent
of organisational
belonging.