Automation of SACCOs - FSD Kenya

vi • AUTOMATION OF SACCOS: ASSESSMENT OF POTENTIAL SOLUTIONS
that SACCOs could choose from once the automation decision has been made
were identified. Analysis and evaluation of the options proved that some are
not particularly suitable in the SACCO context, e.g. in-house development
of a system or the acquisition of open-source software. The project team
concluded that the most viable option is the acquisition of SACCO-dedicated
packaged software. Engaging an application service provider (ASP) is deemed
a good alternative definitely worth monitoring but is currently not considered
attractive as the typical benefits cannot be realised in the SACCO context due
to the underdeveloped market and prevalent infrastructure deficiencies.
The six solutions were evaluated with regard to fulfilment of requirements,
cost, and application maintenance. The project team came to the conclusion
that Bankers Realm (Craft Silicon) and FinSacco (Fintech) seem to offer the
best price-performance ratio. Both solutions provide strong, SACCO-dedicated
functionality at an acceptable price. The vendors’ strong local presence further
supports recommending both as viable automation solutions for Kenyan
SACCOs. With the information at hand, the project team is not in a position to
favour either FinSacco or Bankers Realm, but regards them as comparable.
Amtech’s solution EasySacco was found capable of supporting a SACCO’s
core operations in general. However, the system needs improvement to be
worth recommending with no reservations. It cannot offer the same value as
the leading domestic solutions Bankers Realm and FinSacco. It could still be
worth monitoring Amtech’s offering in the future for the benefit of the smaller
SACCOs who cannot afford the high-end solutions.
Fern’s solution Abacus was generally considered very strong and offered
several key credit cooperative features. Would customisation by the UK vendor
be required to meet SACCOs’ specific requirements the associated cost could
be difficult to recover compared with local solutions. In case SACCOs are ready
to coordinate their system acquisition, Fern is deemed a reliable partner,
bringing with them deep credit union expertise and a strong solution. In this
case and the economies of scale and ABACUS advanced features make it an
appealing option. For the individual SACCO ABACUS does offer good value but
is not our primary option.
Neptune and Temenos both offer simplified and down-scaled versions of their
core banking solutions. While both solutions, Orbit from Neptune and T24 for
MCB (microfinance and community banking) from Temenos, are deemed able
to automate SACCO operations, they are not specific to SACCOs. There is room
for improvement with regard to fully meeting SACCO requirements. Given the
observed price difference between Neptune’s and Temenos’ estimates and
those of other vendors, the project team only recommends Orbit or T24 as
secondary choices, as there seem to be more suitable and affordable solutions
in the market. Neptune’s ASP offering could be worth monitoring. However,
they currently cannot offer the typical cost advantage associated with ASP.
To build a satisfactory basis for automation, a number of considerations need
to be addressed by the SACCOs. They need to assess their ability to acquire,
customise, and implement the application, available connectivity, their ability
to manage the application, and their ability to realise organisational change to
utilise the system. Even if these considerations do not completely prevent an
implementation, they would prevent the SACCO from fully benefiting from the
capacity of the system. The SACCO needs to be aware of these topics and adapt
the approach to automation or develop the organisation before launching the
automation project.