SACCOs, savings and credit co-operative organizations have grown tremendously over the past few years. SACCOs are surely a best way to save your money which in turn promises security for your money. Not only employed people can save through SACCOs but also business people. Inshort anyone can save in a SACCO. These institutions have proven to be advantageous as we can see below.
1. Encourages borrowing
You will need to be consistent with your savings. For this, you are pushed to be consistent with your savings.
2. High dividents
SACCOs earn you a higher dividend at the year compared to fixing the money in a traditional bank account. While banks offer a rate of less than 5% for fixed accounts, SACCOs offer as high as 10% to 14%. The rate of dividends varies from one SACCO to another and depends on the performance for that year.
3. Access to emergency loans
Most SACCOs have emergency loans that are usually processed within 48 hours or less. These range from school fees loans to development loans, depending on your urgency. I started saving with one of the SACCOs back home when I was in campus. During my last semester, my HELB loan got delayed, and I did not have enough money to cover for the whole tuition. I just borrowed from the SACCO and the money was processed in no time, and I managed to pay for my school fees.
4. High borrowing amounts
With most SACCOs, you can borrow 3-times your savings. For example, if your savings are Kes 100,000, you can borrow up to Kes 300,000.
5. Lower interest ratesv
Even with the lending base for banks, SACCO’s still has lower lending rates compared to banks. SACCOs have rates as low as 8% per annum, while banks charge about 14%.
6. Limited liability
Your liability as a SACCO member is limited, meaning your private property as a member is out of bounds in case the SACCO goes bankrupt.
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