The urge to splurge out cash on secondary needs is slowly driving the youth away from saving.
Savings are considered critical funding sources, which enable governments, institutions and individuals undertake investment projects.
Harrison Song’e, the chief executive of Airports Sacco regrets that the younger generation is mostly driven by spending more than savings.
This, he adds, has majorly compromised their patronage to Sacco business concept, which is modeled along savings as a requisite step to accessing credit.
On his part, Wana-Anga Sacco CEO Vincent Otara, thinks the youth will always want money; not loans, a perfect allegiance to their penchant for instant desires.
With only a pay slip and a mobile phone, he says, the youth find no need struggling to save to access credit as is the norm with Saccos, stringent requirements they would deem a complete waste of time.
“This generation has been brought up at a time when obtaining credit from banks and other financial institutions look easier and more attractive compared with Saccos,” says Otara.
In retrospect, the older generation found banks, from which obtaining a loan was not an easy task. This, it is argued, partly motivated people to come together to form co-operatives.
As things stand now, banks have easier loaning terms; simple, fast and automated processes leading to liquidity within no time.
Why should the youth be encouraged to join Saccos, the stringent requirements, thresholds and timelines notwithstanding?
“The trappings that come with being a Sacco member are tenfold,” says James Kanyeki, a financial expert, who likens it to having one’s cake and eating it.
“By virtue of being a member of a Sacco, you are a shareholder. You earn a dividend as an owner and interest on deposits as a shareholder,” he says, adding that with a bank, your savings are used to make profits for the bank but you get nothing from that.
George Njuguna, the marketing manager of Nyeri-based Biashara Sacco, declares a Sacco gives one more than just an avenue for savings and source of credit.
According to him, there is much more than just loans in a co-operative society. Encouraging young savers to embrace Saccos, Njuguna says through free training programmes, members acquire knowledge on financial literacy including sound investment opportunities.
A member of senior management staff of a Tier I Sacco, who declined to be quoted for she is not authorized to speak to the Press, had this to say:
“You will barely come across anyone who will charge you interest rates lower than what Saccos will. Banks and shylocks will have you paying dearly in interest.”
The youth, generally infamous for living in the present alone, should start saving for the future.
“If you do not save, you deny the country a critical mass of savings, the Kenya Union of Savings and Credit Co-operatives managing director George Ototo,” recently said, adding 30 per cent of the GDP is contributed by Saccos.
Maintaining Saccos are the single largest employer of the youth in the country and Ototo says over one billion people in the world are members of Saccos.
At the height of the Covid-19 economic depression, top leadership in the Sacco sub-sector implored on the youth to youth to join co-operative societies in order to strengthen their economic muscle.
Smartlife Sacco CEO Haron Biwott said that the youth find it arduous to the journey of saving as they are able to access instant cash.
“For those employed, presenting a pay slip for a loan makes them shun saving and instead go for bank loans,” he said.
Hazina Sacco chairman Evans Kibagendi was quoted in a section of the media saying that the youth had suffered a lot as the effects of the pandemic continued to derail economic growth thus, effectively denying them an opportunity to make ends meet.
Acknowledging that the youth were not known to possess a saving culture, the chairman revealed then that his organization was rallying the young generation to form small groups and start saving the little they could earn from menial jobs.
“We have developed products geared towards youth and they stand a good opportunity to benefit,” Kibagendi said then.
However, he noted that youth already in Saccos were benefiting a lot as they were able to meet their financial obligations and equally invest in other economic sectors.
He urged the youth to take advantage of the low interest rates offered by the Saccos and numerous and unique products to suit their current lifestyles.
By Our Reporter
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