So, do you want to join a Sacco (Savings and Credit Co-operative Organization) but you are still contemplating on the cost implications of such a decision? That’s great. It is not only a prudent thought but a step towards financial enlightenment. Saccos can build you financially to attain your goals faster than when you are not in one.
However, it would be simpler when you understand that there is no single answer to how much you need to join a Sacco. Every Sacco is unique in respect to how they are managed, their purpose, rules, and regulations governing them. The same applies to the minimum amount you may require to join one.
Nonetheless, to have some light on what you are getting yourself into before you commit to any Sacco would be a plus. The following key factors can act as an eye-opener for you.
1. Registration Fees for Membership
Before joining a Sacco, you should be conscious of the financial requirements necessary for membership in terms of a commitment fee. At least, by paying the amount, the members and the leadership of the Sacco can recognize you are committed to the course. You will even feel some sense of entitlement after paying the registration fees.
The challenging part of it would be, to tell the specific amount in figures that you will be requested to register with. As you read earlier, each Sacco is unique. So, it is advisable to do your background check to know the exact amount of registration fee the Sacco you are intending to join charges.
Just to shed more light, the cheapest registration fee that a registered and fully operational Sacco can charge is Ksh.500. Some charge as much as even Ksh. 10,000 or more. Therefore, the advice would be to go to the one you can afford.
2. Monthly Contributions
Saccos rarely operate money-generating projects—just a few do. This means a Sacco depends on members’ savings to run its affairs. And your monthly contribution will be vital for the success of the Sacco you intend to join. The contribution also forms part of your savings with the institution.
Again, no uniform monthly contribution applies to all Saccos, but be assured, that the amount may be influenced by the size of a Sacco. In terms of its financial assets. The bigger the Sacco, the higher the monthly contribution.
Some do as little as ksh.1,000 per month, as some can go up to even Ksh. 20, 000 a month—or more. You will choose the one which goes with the depth of your pocket or the size of your bank account.
3. Non-Refundable Share Capital
To feel like one of the owners of a Sacco, you pay a non-refundable amount called share capital. The share capital forms part of the financial asset of a Sacco and can also be used to self-guarantee a loan. The amount you can borrow will be influenced by the non-refundable amount plus your accumulative savings.
As the name suggests, you cannot get the amount back, even when you decide to part ways with the Sacco. You can only transfer it to a member in form of shares.
The amount varies in amount, depending on an individual Sacco. Some charge Ksh. 500, still some can charge up to Ksh. 100,000. The good news is, that most Saccos give a grace period to fully settle the amount. You can do it in installments for a while, as directed by a Sacco.
4. Your Time
One more thing joining a Sacco will cost you is your time. And don’t forget time is money, meaning it is valuable. After meeting all the requirements of joining a Sacco and paying the money required, you will be attending some necessary meetings, like the annual general meetings.
Finally, cut your coat according to your shirt. Do your research and calculations well before you join any Sacco. Until you know all the requirements and terms and conditions.