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What Makes a Sacco Different: The Benefits of Joining a Sacco

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Saccos stand out from other financial institutions for several reasons. For starters, members can save money, buy shares, and take loans. Once you’ve started saving, you cannot access the savings. You can only take a loan or discontinue your membership, in which case you’ll take your savings with you. Secondly, there are no charges to your savings. And lastly, you stand to gain from annual dividend depending on the Sacco’s profit throughout the year. 

Saccos in Kenya have dozens of other benefits that only members can enjoy. Wondering what these are? Read on to find out. 

Saccos inspire a saving culture

One thing about money is that it is rarely enough. You might get a salary increment today; get all excited about it, only to end up getting stuck in the same vicious circle of debt a month later because of the ever ballooning financial responsibilities spurred on by a new lifestyle. So, to save yourself the agony of retiring with nothing to show for your hard work, take advantage of Saccos.

Saccos require members to save every month, which fosters financial discipline. Continuously, committing a percentage of your money instils a saving culture and also acts as a security. 

And the good news? Even when you take a loan, your monthly contributions continue. Now, before you frown at my not so good news, remember it’s the discipline that comes with regular saving that matters. With a Sacco membership, you’ll evade the usual, “I don’t have enough money to save this month” or the award-winning excuse, “Once I finish this loan! I’ll start saving diligently.” 

Return on investment

Saccos give dividends annually to their members. Members are entitled to a dividend because they are shareholders. The dividend members get depends on the profit Saccos make. Individual member savings will determine the rate of dividend one gets. The more the Sacco’s profits, and the more you save, the higher the dividend you get at the end of the year. 

Emergency loans

This is where Saccos get a standing ovation. Emergency loans are lifesavers. Most Saccos in Kenya offer emergency loans within 24 hours, while others have a first turnaround of 30 minutes. This, coupled with the fact that the loan interest rate is low, makes Saccos the preferred option over banks when it comes to emergency loans. Since the loan is given within a short time, the payment duration is also limited to a short period. 

Limited liability

Sacco members can rest easy knowing their liability is limited to their savings. If a Sacco goes bankrupt, the member’s personal assets remain secure. 

Investment opportunities

Saccos have different development projects that their members can invest in. Some Saccos invest in properties like land and homes, which are sold to members at affordable prices as compared to real estate firms’ prices. Besides, purchasing a house from a Sacco saves members from the risk of losing money to scrupulous middlemen and the prolonged hectic dealings with real estate firms. You can be assured the property is legit. 

Cheap interest rates on loans 

As alluded to earlier, Saccos’ loan interest rates are low as compared to other financial institutions. Secondly, depending on the Sacco, members can borrow up to three to four times their savings. The catch? You’ll need a guarantor or collateral as security for the loan. 

With that said, I hope you know the next step of action.  And to help you get started, here is a list of the top Saccos to join in Kenya. Hop on board and start investing in your future today. 

Mourine Odongo
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