Saccos have increasingly become popular In Kenya acting as vehicles for financial inclusion and wealth creation.
Saccos are member-owned financial organizations that provide affordable credit facilities to members. Interest rates charged on SACCO loans are generally lower than those offered by commercial banks, making SACCOs a better option for major investments in the country’s economy.
Based on the SACCOs’ more flexible and personalized approach to lending, their members are offered an opportunity to negotiate loan terms to suit their specific needs.
SACCOs offer members the opportunity to invest their savings in various investment vehicles, such as fixed deposits and treasury bills which immensely contribute to the country’s economy.
This is a good arrangement for members who do not have other collaterals to offer. To a larger extent, SACCOs are typically more willing to lend to members who have a lower credit score compared to commercial banks.
Saccos offer longer repayment periods for their loans than traditional banks. They also offer members access to financial education and literacy programmes hence empowering them to make informed financial and socio-economic investment decisions.
Unlike commercial banks and other financial institutions, SACCOs have a vested interest in the financial well-being of their members hence are more responsive to the needs of their members.
Besides offering their members opportunity to earn dividends on their savings, Saccos are member-owned institutions, governed by their members themselves hence their interests align with those of the members.
By Ben Oroko
The Writer is a Communications practitioner and correspondent based in Kisii-Kenya.
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