Unlocking saccos' potential through IOT to enhance efficiency, risk profiling, and member engagement

Abstract

Savings and Credit Cooperative Organisations (SACCOS) underpin financial inclusion for underserved and rural communities, yet they struggle with service-delivery inefficiencies, weak member engagement, high loan-default risk, and opaque operations that fuel membership churn. As digital transformation sweeps the financial sector, Internet-of-Things (IoT) technologies have emerged as a promising catalyst for stronger SACCOS performance and sustainability. This study evaluates the feasibility and perceived value of IoT integration in SACCOS performance across Tanzania using a cross-sectional survey as the sole data collection method. Structured questionnaires were administered to 131 board members, managers, loan officers, and ordinary members across 10 SACCOS. Using multiple linear regression, the study assessed ten digital‐transformation predictors against overall SACCOS performance. The model demonstrated excellent fit (R = 0.990; R² = 0.980; Adjusted R² = 0.978; SE = 0.160; F(10, 120) = 578.320, p < 0.001). Statistically significant positive predictors included Perceived Organizational Support for Digital Transformation (B = 0.701, p < 0.001), Perceived Benefits of IoT Applications (B = 0.142, p = 0.008), Loan‐Repayment Alert System (B = 0.105, p = 0.006), Digital Record‐Keeping Implementation (B = 0.074, p = 0.020), Infrastructure and Technical Challenges (B = 0.082, p = 0.026), and Cybersecurity and Data Privacy (B = 0.113, p = 0.046). In contrast, Asset‐Tracking Beacon Deployment exhibited a negative association (B =–0.117, p = 0.010), suggesting premature or unsupported deployments that hinder performance. These findings imply that successful IoT integration in SACCOS requires more than procuring ICT devices, it depends critically on robust organizational backing, clear demonstration of practical benefits, comprehensive digital‐record processes, and strong security measures. The study recommends that, SACCOS must secure visible commitment from leadership on establishing ICT governance structures, allocating dedicated digital‐transformation budgets, and setting clear performance targets to ensure technology initiatives align with strategic goals. It is equally important to provide hands‐on training and change‐management support for both staff and members, ensuring that everyone adopt new IoT workflows confidently.