At a time when many savings and credit cooperatives are grappling with rising non-performing loans and increased regulatory scrutiny, KCS Sacco is charting a different path, one defined by technological innovation, resilience, and steady financial growth.
During its 8th Annual General Meeting, the Sacco unveiled a major milestone: the launch of an AI-powered call centre developed in partnership with Safaricom.
The innovation signals a bold step in the Sacco’s ongoing digital transformation journey and positions KCS as a forward-looking institution within Kenya’s cooperative movement.
AI at the Heart of Member Engagement
Chief Executive Officer Gedeon Gitonga Kigo described the new AI-driven system as a solution to one of the Sacco’s biggest growth challenges, communication.
“As the organization grows, communication becomes more complex,” he said. “The system we have launched will enhance how we interact with members by integrating email, WhatsApp, and other communication channels into one seamless platform.”
The AI-powered call centre is designed to improve responsiveness, streamline inquiries, and provide members, including those in the diaspora, with faster and more efficient services.
During the AGM, the Sacco recognized a member based in Ohio, United States, underscoring how digital systems are expanding its reach beyond Nairobi and even beyond Kenya.
This innovation builds on the Sacco’s migration to a new co-banking system powered by Microsoft, following a system failure last year with its previous service provider.
The earlier glitch, which temporarily disrupted operations, proved to be a turning point.
“What seemed like a crisis pushed us to seek a better solution,” the CEO explained. “With Microsoft, we now have a more agile system that integrates mobile apps, USSD services, banking systems, and M-Pesa. It allows us to plug in future technologies easily.”
The partnership with Safaricom further strengthens this ecosystem, particularly in mobile banking integration and communication infrastructure.
Financial Performance Reflects Strategic Shift
Beyond innovation, KCS Sacco’s financial performance reflects significant growth.The Sacco hit a historic milestone, with its asset base rising to KSh 501 million, a dramatic leap from its humble beginnings eight years ago when assets stood at approximately KSh 1 million.
Revenues nearly doubled to KSh 74 million, while dividends remained steady at 8 percent, with share deposits earning 15 percent, translating into higher payout amounts due to overall growth.Non-performing loans (NPLs) also dropped sharply.
According to the CEO, the rate declined from 19.5 percent last year to 9.5 percent, with a target of reaching the regulator’s benchmark of 5 percent.
This improvement is partly attributed to a shift in lending models.
While the Sacco has not eliminated guarantor-based loans, it has increasingly embraced collateral-backed lending.
Currently, 85 percent of its loan book is secured through collateral such as land and vehicle logbooks.
“The world is changing,” the CEO noted. “Members today prefer independence. Many live in apartments and may not even know their neighbors well enough to guarantee them. Collateral gives members flexibility and protects the Sacco.”
Compliance and Stability
The Sacco’s leadership emphasized its commitment to regulatory compliance under Sacco Societies Regulatory Authority (SASRA).
Chairman Epainito Kerosio Chahale stated that compliance remains a top priority and expressed optimism about obtaining the regulator’s certification this year.
On capital adequacy, the Sacco stands at 13 percent against the required 10 percent. Institutional capital is at 47 percent, and liquidity ratios are above the regulatory threshold, signaling strong financial health.
“Our focus is not only on giving loans but also on ensuring we meet all regulatory ratios,” the CEO said. “We are building for sustainability.”
Leadership, Trust, and Community Investment
Chairman Chahale credited the Sacco’s improved performance to strong leadership, competent staff, and committed members.
Dividends rose from 7 percent last year to 8 percent this year, while share deposit returns increased from 8 percent to 10 percent under his leadership.
He emphasized that governance integrity remains central to the Sacco’s survival.
“When Saccos get greedy leadership, that is when funds are embezzled,” he warned. “We are careful about who joins leadership. They must be trustworthy and credible.”
Beyond financial returns, the Sacco continues to invest in Corporate Social Responsibility initiatives, including scholarships for needy students and support for the Karura Community Football Club, part of its broader commitment to community empowerment.
A Digital-First Future
As regulators tighten capital adequacy requirements and the financial sector becomes increasingly digitized, KCS Sacco appears determined not just to adapt but to lead.
“Very soon, if you don’t embrace technology, you will stagnate,” the CEO observed.
With an AI-powered call centre, a robust Microsoft-backed core banking system, and expanding digital integration through Safaricom, KCS Sacco is betting that innovation, backed by sound governance, is the key to sustainable cooperative growth.
And if this year’s numbers are anything to go by, that bet is already paying off.
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