|Need for Change Towards New SACCO Regulatory Framework|
|Monday, 04 June 2012 13:57|
By Joel Chigoneka
Ask anyone in the SACCO fraternity and most will say today’s financial cooperatives’ regulatory environment is the most complex we have ever seen. The newly introduced financial cooperatives law has attracted a lot of comments from players within the movement yet there seems to be no consensus on whether having such a regulation in place will strengthen or weaken the SACCO Movement in the country. As an auditor though, and fully aware of SACCO’s role in the country’s economic growth vis-à-vis the risks prevalent in SACCOs; a need for prudential insights becomes non optional.
I am quite aware that it is very difficult to strike a balance between reasonable member funds’ safety and operational soundness standards without imposing excessive regulatory burdens. Leaning on this fact, I would like to register my support for this regulation. To me, maintaining a right degree of regulation provides tremendous benefits to SACCO members and communities, and to the industry’s overall health.
Well regulated SACCO movement entail enhanced members confidence and clever managers and directors can leverage on this strengthened member trust to foster growth. Stretching this advantage a bit, one can realise that the solid member confidence and trust can eventually lead to enhanced spirited advantage enabling SACCOs to wrestle business with other licensed financial institutions. This, as one SACCO expert argued, has a potential to create a fertile ground for SACCO’s increased profitability.
We need also not to forget that SACCOs are financial institutions operating within a financial sector which is currently experiencing a chain of reforms. Just like any financial institution, SACCOs are expected to demonstrate some level of operation efficiency to be considered as suitable choices for financial services provision. A tailor made regulatory framework to further proficiency, like the financial cooperatives act, is a must therefore.
Migration and successful adaptation to the new SACCO regulations is a key constituent to a thriving and profitable financial cooperative movement in the country. I know this is a challenge to many SACCOs but all SACCO leaders need to know that adapting to change is very crucial as survival and success in today’s world depends on our capacity to adapt. Organisations cannot thrive today without learning to adapt to changing business landscape. Adapt or perish is the new slogan in the 21st century.
My conclusion is that, this regulation is not a stumbling block to SACCO’s growth or development. The strong governance and financial prudence requirements should motivate us in ensuring safety of members’ funds in SACCOs at all times.
Policy Makers Symposium on Growth and Development of Savings and Credit Cooperatives in Malawi
Date: May 27 – 28, 2013
Venue: Bingu International Conference Centre
Symposium Theme: Embracing Financial Cooperatives as a...
Safe and sound SACCOs for everyone in Malawi.
To support SACCOs in Malawi on a sustainable basis to promote good access to quality and affordable financial services to members in accordance with international cooperative principles.