Why You Must Join A SACCO While You Are Young

I must confess I always feel out of place whenever I attend any of my annual SACCO meetings, not because they do announce our shares, but because more than 90% of the attendants are elderly people. In one of the meeting, during a lunch break, one elderly lady approached me and said, "You have done the best thing by joining the SACCO while you're young."  And our story did last for some time.

That's why I'm writing this article.

In this age, very few people, few indeed, under the age of  35 are members of a SACCO. This is largely due to the fact that they don't know the importance of such an institution, or they don't understand what they are in the first place. In this article I'm going to shade light on what a SACCO is and why you MUST join one

Major facts about a SACCO
  • SACCO is an acronym for Savings And Credit CO-Operative,
  • Is an association of  like-minded individuals registered under the ministry of Cooperatives (that is in Kenya). 
  • The group is authorized to take deposits from and lend to their members. 
  • Is governed by the SACCO by-laws.
  • The whole sector is controlled by the SACCO Society Regulatory Authority (SASRA). 

 Let's go to the main agenda: Why are SACCOs important to you? Why must you join one?

1. Loans.
Ask businessmen where they got the capital, or how they fund their businesses when stuck. Ask your parents how they managed to pay school fees when the need simply did pop out of nowhere. Ask the guys driving new cool cars where their log books are. They have one answer: The Loan. I know most of us fear loans and have vowed never to take one. I can simply tell you get yourself out of that box before you are forced to. And the earlier you do that the better.

Why SACCO loans and not Bank loans? The reason is obvious: the interest rate. Currently, SACCOs are cupped to lend at 12% p.a. as compared to the banks' average rate of 20% p.a. Most SACCOs led up to 3 times the member's saving, but the loans are short termed and less priced than the bank loans.

One advantage I've learnt by taking a loan is the fact that I commit my money to do something valuable. Money will always find an expense if left to lie anyhow - and very genuine expenses for that matter, only that they mostly don't add value to your life.

2. Saving
SACCOs take deposits for their members, mostly monthly. Trust me it's not always easy to save voluntarily since, as I said money will always find expenses. SACCOs help you build a "saving discipline" because you must deposit a certain amount of money monthly. The good thing is (or should I say bad) you can't access this savings unless you decide to leave the SACCO. This protects the savings. And I like that.

May be one more thing you need to know is that SACCOs give to members a bonus each calendar year. This comes from the interest gained from lending the saving and any investment done. It's called "letting your money work for you".

3. Free knowledge
You have had the cliche "iron sharpens iron." People who choose to join SACCOs mostly are serious guys who want to do something valuable with their lives. Interacting with these minds will help you gain knowledge on money matters. Seeing other people progress, open business and achieve much will encourage and propel you to doing something. Again, participating in the projects carried out by your SACCO will give you an opportunity to develop skills in project management. The world also opens up for endless opportunities when you connect with new faces. That is guaranteed.

None of these things are found in a bank. If any, you shall surely pay for it.

But my main desire is to see more young people do this early. Now, are you a member of any SACCO? Do you know any of them? May be it's time u start thinking on the same. Commit your money before it is too late!

You May Think To Think Big
You can actually decide to form your own SACCO. All you need is to bring guys of the same mind together and start pooling your resource together. You may start small but make your goal clear. Learn what is required of you  from SASRA and you'll be good to go.

Another Good Point
A SACCO is starting point for savings. As you grow in Financial matters, you shall realize more ways of saving your money.

All the Best!