Amazing Benefits of joining a Sacco in Kenya

“I’m sorry, but you do not qualify for a loan at this moment, but you can try next time when you have substantial security.

Those are some of the words that you will often hear from a bank loan officer when trying to access a loan from your bank which you have been an esteemed customer for over a period of time.

It has become increasingly difficult to access loans from a bank these days. But what if I told you that all that struggle and suffering to acquire a loan can end right now? What if I told you there is a savior and his name is SACCO?

Yes, SACCOs are becoming more popular nowadays, especially with people who have had very little success when it comes to acquiring loans from the bank, mostly employees on contract, new upcoming business people, etc.

And just how do SACCOs come in and of what benefits do they offer.

A SACCO is an acronym for Savings and Credit Co-operative Society. SACCOs are usually formed and run by members with a common goal and vision and that is mainly to provide financial power to its members. The underlying principle of a SACCO is to save and provide credit facilities to its members.

So what are some of the advantages of becoming a member of a SACCO?

SACCOs help you to save.

As a member, you are usually required to contribute a certain amount of money towards your savings. You all know how it’s hard to save especially if you don’t have a specific goal in mind. But with a Sacco, you can continuously keep on saving until that day that you will come up with an idea for something. It could be a business, buying land, a house, etc.

It’s much easier to secure a loan from a SACCO as opposed to other financials.

As a member you are usually entitled to getting a loan that is usually worth a certain number of times the value of your deposits. It could be three or four times depending on the SACCO`s policies. In addition to the ease of acquiring a loan the interest charged on the loans is usually much cheaper than financial banks.

Being a member, you are a co-owner of the SACCO and therefore you are entitled to dividends annually.

SACCOs usually pay a good dividend rate on your entire savings. The dividend rate may be as high as 10% to 15%.

Imagine if you had Ksh.1,000,000 worth of savings and the SACCO declared a dividend rate of 10%. That’s a whooping Ksh.100,000 in your pocket. Seriously, how better can it get?

Are you planning on saving for retirement but don’t have a concrete idea as to where to save? Why not start with a Sacco.

As I mentioned earlier SACCOs usually give a good dividend rate and if you can save let’s say Ksh.5,000,000 by the time you are retiring and Sacco declares a 10% dividend rate annually that translates to Ksh.500,000 annually. Divide that by 12 and you will be earning roughly Ksh.41,667 per month.

Also, there are certain SACCOs that do acquire land and build houses that interested members can purchase at affordable prices.

If you have been trying to access loans from banks but you are being turned away every time then you should try SACCOs. They are a good option and the interest rates are relatively low.

Unfortunately, some individuals have taken advantage of this opportunity to fleece Kenyans of their hard-earned income by starting false savings and credit organizations or scams. I would like to educate you on how to avoid scam SACCOs;

~Make sure they are registered by SASRA

~Make sure they have a thriving membership

~They should operate ethically

~Avoid organizations that promise insane end of month returns on investment

Finally;

Ever heard the story of the taxi driver who ended up owning an entire fleet of transport vehicles? Or the grocery lady who grew from one small kiosk to owning an entire estate of rental apartments? Well, behind all those sweet stories are little-known financial institutions commonly referred to as SACCOs.

This is how SACCOs work – You become a member, set your saving goal and start saving. Let’s say you start today and target to save Ksh.50,000 in the next 10 months. After you reach that target, your credit organization gives you a friendly loan that is as much as 3 to 4 times your savings.

So you get Ksh.200,000 which you can use to expand your business further.

Easy, right?