Over the years, Saccos have emerged as the new frontier of development in Kenya. With their flexible financial solutions, the institutions are transforming the lives of ordinary citizens by providing them with access to credit and savings facilities.
As of 2021, there were over 15,000 registered Saccos in Kenya with a total membership of over 14 million people.
One of the key advantages of Saccos is that they are member-owned and controlled, which means members have a say in how they are run.
This democratic structure ensures that the interests of members are always at the forefront of decision-making.
Moreover, Saccos offer their members a wide range of financial services, including savings accounts, loans and insurances.
The flexibility of Saccos is another factor that has contributed to their success. Unlike traditional banks, Saccos do not have a rigid lending criterion that excludes people with low incomes or those who lack collaterals.
Instead, Saccos offer flexible loan terms and repayment schedules that are tailored to meet the needs of their members.
Saccos have also proven to be effective in promoting financial inclusion in Kenya. With their focus on serving the needs of the under-served and unbanked, the financial institutions are helping to bridge the gap between those who have access to financial services and those who do not. This is particularly important in rural areas where traditional banks are often non-existent.
To address this challenge, the national government and other stakeholders are working to improve the regulatory environment for Saccos and to provide support for their growth and development.
These include efforts to strengthen Sacco governance, promote financial literacy among members and increase funding through initiatives such as the Deposit Guarantee Fund (DGF).
Another advantage of Saccos is that they are able to offer their members competitive interest rates on loans and savings.
This is because Saccos operate on a not-for-profit orientation, which means that they are able to pass on the benefits of their lower operating costs to their members.
At Stima Sacco for example, we offer affordable and flexible loan facilities to provide attractive investment options for our members. Through our robust digital platform, members can access their accounts and transact from anywhere in the world, at any time of the day or night.
Saccos play a crucial role in promoting financial inclusion and economic development in Kenya.
With their member focus approach, flexible financial solutions and competitive interest rates, Saccos are transforming the lives of ordinary Kenyans by providing them with access to credit and saving facilities.
By Gamaliel Hassan
The author is the CEO of Stima Sacco.
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