Benchmarking for growth

10-06-2014 Understanding where you stand in the industry and how you compare to your peers, is an empowering exercise. It provides you with useful and practical information on why others are doing better and how they do it. Normally it starts with facts and figures, rather than intuition. Benchmarking is a learning exercise in the process towards making better informed business decisions. It is because of this fact that Agriterra facilitated the benchmarking exercise of four SACCOs in Kenya with strong support of its Agripoolers of Rabobank and ABN AMRO bank.

Benchmarking is much more than an exposure visit, it involves collecting and comparing data, asking fact finding questions (not opinions); this was the message to the invited SACCOs. For the five days they were together, the SACCOs compared different aspects of their organizations with each other, from figures in their annual audited financial statements to strategic issues and how they pursue them.

For such an exercise, learning how to do it for future use is key thus the facilitators practised several methods like fishbowl discussions and local office observation visits. These new methods from highly experienced Agripoolers underline the strengths that Agriterra brings to its SACCO clientele.

The event was the first of its kind in Agriterra, it was therefore important to meticulously execute it for positive success so that in future the SACCOs can do it themselves and in fact, benchmark with even bigger/larger peers so they get stimulated over and over again to improve their business development.

During the week, apart from selecting and comparing key financial figures and ratios, the participants identified and discussed the following five strategic topics which were urgent to them all: Loan defaults management, Marketing, Funding, Mobile banking and Governance. They shared a lot on these topics and their contributions were supplemented with expert knowledge from a commercial Kenyan bank and the challenges put on by the facilitators.

As a way forward, each SACCO had to prepare a presentation of what they learned during the week and the best practices they were carrying a long to their organizations. Benchmarking and selecting ratios bottom up to get more insight turned out to be fun. A good reason to continue benchmarking in the future. The group decided to organize their next benchmarking event before the end of 2014.

This benchmarking exercise bore synergistic opportunities worth exploring as the participants found out that they can, inform of two teams, jointly team up to invest in mobile banking as they shared the same software provider (one provider per team). This would drastically reduce the outlay cost.