Why you need to invest in a SACCO

Cynthia Wandia


Saving regularly, whether individually or as a group, is a virtue that has been told and retold many times. The art of saving money to grow wealth has seen many people gain considerably and secure financial freedom.

Kenya has a very vibrant cooperative culture, with a number of individuals investing in Savings and Credit Co-Operative Societies (SACCOs). A majority of SACCOs in Kenya, trace their roots from table banking groups or organizations founded by people with particular shared values.

The vibrancy of Kenya’s Cooperative space and particularly the popularity of SACCOs is due to the difference in operating structure from other financial institutions. Unlike other financial institutions, SACCOs are member-owned. This essentially means that every member has a stake in his or her SACCO. Every major move any SACCO makes has to be approved by the members in an Annual General Meeting (AGM) or through any other mechanism agreed by the members.

The structure of SACCOs is also not as rigid as other financial institutions as they provide and create a culture of belonging to all their members. The loan accessibility comes from your ability to secure a loan for which you do not need collateral unlike banks and microfinance institutions. You can borrow against your savings or another member or members of your SACCO can guarantee you.

SACCOs also encourage members to save. In order to gain from your SACCO, you need to save consistently and grow your savings so that you can get healthy dividends. Saving diligently also enables you to secure higher loans that are interest friendly - up to three or four times your savings depending on your SACCO.

Some SACCOs have helped to grow their members through investing members’ savings in joint ventures such as land or real-estate that members can purchase at reduced rates. This has helped many SACCO members to own property.

"Digitization has created a lot of efficiencies in SACCOs. Securing a loan in a SACCO is simpler today. Many SACCOs have digitized their systems thus loans are today disbursed faster through mobile banking. Real time information is also available to members of digitized SACCOs."

Cynthia WandiaCo-founder & CEO of Kwara
Cynthia Wandia, Portrait smiling

In a world where needs arise on the go, SACCOs have emergency loans. Some SACCOs offer emergency loans for school fees, medical needs or other unexpected costs. For a SACCO that has digitized, these loans can be processed within minutes which helps members avoid shylocks. SACCOs are also compassionate in the event a member suffers a financial setback and works with their members.

Investing in a SACCO is a good idea for anyone looking to grow wealth. The benefits are immense, the risks are low and the rewards are life-long. Let’s all be part of the success stories in our SACCOs by saving in a SACCO.

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