Why SACCOS need digital shift to serve next generation

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OPINION

By Douglas Damba

In towns and villages across Uganda, the heartbeat of local enterprise often pulses through savings and credit cooperative societies (SACCOS).

These have become the bedrock of our local economies, offering quick access to credit, pooling savings, and helping small businesses turn ambition into action. Yet as the world rapidly digitises, a pressing question emerges: what happens when this bedrock begins to crack under the pressure of change?

We see the signs already. The SACCOS manager, buried in paper ledgers, instead of focusing on growth. The young, tech-savvy vendor in Namutumba who can pay suppliers instantly on her phone, but must travel hours just to make a loan repayment. The farmer in Kisoro whose loan is delayed because his paper-based records slow down risk assessment. These stories reveal a widening gap between the timeless value of community and the fast pace of the modern economy.

The danger is a two-tier system: a digital, fast-moving formal sector and an analogue co-operative ecosystem struggling to keep its members engaged. To avoid this divide, co-operatives must commit to a future that is both fully digital and fully inclusive.

According to the Ministry of Trade, Industry and Cooperatives, the number of registered SACCOS surged from 5,798 in 2015 to more than 31,800 by March 2025.

Co-operative organisations also report that credit from SACCOS is now the largest source of formal financing available to rural households.

According to the Uganda Co-operative Alliance, only about 11% of Ugandans use traditional formal financial institutions, meaning nearly nine out of 10 citizens rely on informal or semi-formal channels like SACCOS for essential financial services.

Now, picture a different reality.

Amina, a farmer in rural Mbale, wakes up and checks her SACCOS balance on her phone. She does not need a smartphone; a simple USSD code is enough.

She moves part of her crop earnings into savings, applies for a loan while preparing breakfast, and by lunchtime receives an approval alert.

The funds land instantly in her mobile wallet. She pays school fees, receives reminders about her savings goals, and even votes in her SACCOS annual meeting online.

This is what dignity and inclusion feel like. Less travel. Lower costs. Faster service. Better records. A stronger bond between member and institution.

But digital transformation without inclusion creates new barriers. The goal is not to replace cooperatives’ community spirit, but to strengthen it with tools that everyone can use. This means solutions that work on basic phones, simple interfaces in local languages, financial literacy support, affordable access, stronger governance through digital records, and data that improves lending decisions.

When these elements come together, cooperatives become not only efficient but also more equitable.

At the recent Annual Cooperatives Convention, where I served as a panelist, it was clear that this future is already taking shape. New solutions are being built to help SACCOS digitise operations, automate record-keeping, introduce mobile savings and loan access, and strengthen governance.

We have invested in digital platforms that let SACCOS transact more easily, and we continue to offer financial literacy and capacity-building programmes. These include training on governance, record-keeping, and decision-making in partnership with SACCOS and community organisations. The aim is simple: Support cooperatives as they enter the digital age without losing the values that make them powerful.

The writer is the head of business banking at Diamond Trust Bank