Digital Capability, Knowledge Capital, and Governance in East African SACCOs: A Systematic Review of Drivers of Financial Inclusion

Abstract

Savings and Credit Cooperative Organisations (SACCOs) remain central to financial inclusion in East Africa, particularly for rural and low-income populations excluded from commercial banking. However, despite their growth, SACCO performance across Uganda, Kenya, and Tanzania remains uneven due to technological, governance, and knowledge constraints. This study undertakes a theory-driven systematic review of SACCO performance between 2020 and 2025 to examine how digital capability, financial knowledge, governance quality, and community embeddedness shape inclusion outcomes. Grounded in Institutional Theory, Resource-Based View, Agency Theory, and Technology Adoption frameworks, the study synthesises peer-reviewed literature, regulatory reports (Kenya Sacco Societies Regulatory Authority (SASRA), Tanzania Cooperative Development Commission (TCDC), Uganda Microfinance Regulatory Authority (UMRA)), and global datasets (Global Findex, GSMA, WOCCU). Using structured thematic coding supported by qualitative synthesis procedures, the review identifies four interdependent drivers of SACCO sustainability: digital integration capacity, member financial literacy, governance and oversight quality, and social capital density. Findings indicate that digital adoption improves outreach and transaction efficiency, but its impact depends critically on member knowledge and regulatory capacity. Weak governance and agency problems remain primary predictors of SACCO failure, particularly in poorly supervised environments. Community networks enhance repayment discipline and savings culture, but cannot substitute for institutional accountability. The study contributes by integrating fragmented SACCO literature into a coherent systems framework and proposing a SACCO Institutional–Digital Capability Model for future empirical testing. Policy implications emphasise coordinated investments in digital infrastructure, governance reform, financial capability development, and predictive oversight systems.