Saccos may at times be sidelined as favorable sources of credit largely due to the popularization of more conventional credit facilities such as banks and microfinance institutions.
Nevertheless, saccos are gradually gaining traction as awareness of their functionalities and operations are consumed en masse leading to uptake in admissions at various saccos.
Despite the distinct formalities associated with saccos, there are certain distinguishable factors that set them apart from each other.
Such factors are what ultimately form the basis through which one should put into consideration when looking to join a sacco.
What to consider before joining a sacco
Currently, there are more than 300+ licensed saccos in Kenya spread out across different sectors. Therefore, to be able to make an informed choice based on one’s preference, an individual should focus on the vital components below.
1. Common bond
This refers to having shared interests in terms of occupation, family, relatives, religion etc whereby it plays a very important role especially when it comes to guarantors hip.
Joining a sacco whose members have built rapport through common interest goes a long way as opposed to membership whereby the majority of the members are strangers.
By definition, reputation refers to the general perception held by external entities towards a particular subject. It can either be categorized as good or bad whereby the former is acceptable as opposed to the latter.
A sacco’s reputation may be characterized through its operations in terms of handling of members’ deposits, history of dividends payouts and interest rebates etc
3. Dividends payouts
One of the major reasons for joining saccos is the ability to earn passive income through dividends earned from share capital.
Generally, share capital refers to partial ownership of a sacco whereby the larger the share capital, the larger the dividend payout based on a sacco’s annual performance.
Typically, saccos usually have varying dividends rates and is therefore advisable to choose one that offers a consistently high dividend payout rate inorder to maximize on return on investment
Saccos are legally recognized institutions licensed to undertake their various operations in terms of deposit-taking and credit functions.
It is through this legality that saccos in Kenya are governed under a strict set of rules and regulations whereby non-compliance is penalized by the governing body known as Sasra.
This ultimately ensures accountability and averts mismanagement of member deposits. Click here to check out the list of licensed saccos in Kenya 2022.
These are the charges associated with membership of a particular sacco. They can be in the form of membership/registration fee, monthly contributions, minimum share requirements etc
Before joining a sacco, ensure that you can comfortably meet the sacco’s financial demands by opting for saccos with lower charges.
6. Product variety
The formation of the majority of saccos in Kenya is based upon taking deposits and offering credits. However, there are additional services and products that are exclusively offered by some saccos compared to the others.
Such additional may include; online and mobile platforms for easier account management, investments, insurance etc
Technology is dynamic and as such, it has penetrated in almost all sectors of the economy including saccos whereby majority have embraced digital platforms in the form of online portals and mobile banking.
The adoption of such advancements has ultimately led to efficient service delivery whereby manual trips to the sacco headquarters or branches is minimized.
This refers to the convenience of having access when in need. This can be in various forms such as online website, active phone numbers, social media channels eg Facebook, twitter, Instagram etc
Number of branches also play an important role whereby the higher the number of branches in different locations/regions, the more accessible a sacco is regarded to be.
9. Customer service
This department acts as the ‘face’ of any given organization and generally contributes towards its overall reputation.
Therefore, a sacco’s reputation is as good as its customer service team who are ready to offer timely assistance to any inquiries made regarding the sacco.