Business opportunites for Stima Sacco society limited in a new regulatory environment
Savings and Credit Cooperatives (SACCOs) in Kenya are for the first time operating in a regulated environment after the enactment of SACCO Societies Act, 2008 and the SACCO Societies Regulations, 2010. The new law establishes an independent Authority Known as the SACCO Societies Regulatory Authority (SASRA), which has powers to license, regulate and supervise SACCOs, carry out regular inspections, control their ownership and governance practices and manage a Deposit Guarantee Fund among other responsibilities. This study was aimed at establishing the challenges that the new regulatory environment posed to Stima SACCO Society Limited and the strategic business opportunities that it had created. The strategies that the SACCO could use to exploit the business opportunities and overcome the challenges posed by both its external and internal environments were established. The research was conducted through a case study design where the researcher used structured interview to guide as primary data collection instrument. Data collected was qualitative and was analyzed by content analysis, to establish the challenges and business. The study concludes that the new regulatory environment provided more structured and clear guidelines on the operations of Stima SACCO. The new environment was also found to be more focused on the safety of the members' funds hence creating more customer confidence and more dynamic and enabling environment for business growth of the SACCO. The new environment further creates various business opportunities, albeit the challenges that it poses to the SACCO. The study recommends that Stima SACCO should tum its challenges into opportunities and exploit the opportunities to survive in this unfamiliar regulatory environment, hence register an unprecedented business growth. In doing so the SACCO needs to review its by-laws to serve a wider market including the microfinance market, merge with like-minded SACCOs, benchmark with other financial institutions and review its business model to become a more inclusive and market driven financial intermediary.