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Debunking myths about joining Saccos

3 min read

The mere mention of the word Saccos rouses bitter-sweet feelings amongst many Kenyans whereby the former have fallen prey to rogue Saccos while the latter have reaped a myriad benefits from joining them and count it a blessing.

Since their inception in the early 1900s, when European settlers came to Kenya forming their own all-white cooperatives, to 1940s when Kenyan natives were allowed to establish and join cooperatives; to the following decades that have seen over a thousand Saccos established.

Throughout this period, Saccos have basked in the glory of their advantages until the recent past where numerous scandals have surfaced about unscrupulous business men, who have established fake Saccos and conned innocent Kenyans out of millions of savings.

Saccos have been shrouded in popular myths that cannot be further from the truth, the classic case of two rotten tomatoes spoiling the entire basket.

Despite the recent spate of events, there are legitimate Saccos that have helped many Kenyans in accessing loans at cheaper interest rates to achieve their personal and business endeavors.

Sacco Times demystifies 5 popular myths about Saccos in Kenya.

1. Saccos are embezzlement Schemes

The Saccos that have been involved in huge scandals have given all Saccos a bad name. They have clouded the advantages that legitimate Saccos have offered to their members. No one wants to get conned out of their savings and as such many have withdrawn and as for new membership the numbers have dwindled immensely.

However, there are many legitimate Saccos that have positively changed the lives of many a Kenyan. The foundation of ascertaining that you are not being conned is of paramount importance. One can do this by:

Certification: When was the Sacco formed, is it registered under the Saco Societies Regulatory Authority (SASRA)? Is it up and running with thriving membership?

Terms and Condition/Rules and Regulations: It’s vital to understand all these rules to ensure you are fully aware of what you are getting into.

Management Team: Who are these people heading the institution, what core values have they set to spearhead running the Sacco?

Physical Address: As much as everything has become digital, you need to know where your Sacco is located.

2. Lack of Sufficient resources.

The notion that it is better of taking up a loan in the bank as opposed to a Sacco, is False, this is just dependent on the amounts. Of course banks are capable of giving bigger loans compared to Saccos; however, their interest rate might be higher.

On the other hand, there are big Saccos that are capable of delivering big loans to their members given that terms and conditions are followed as stipulated.

3. Fear of disputes and wrangles.

The so –called murky ‘Sacco politics amongst the management team, would result in the disappearance of funds because of the division is also False.

There is a binding contract that dictates any action taken by the Sacco.

4. Lack of Accountability.

There is a misconception that in the case that a Sacco submerges, the members are left high and dry. Any business can go under but the good thing is that you can always pull out your investment from your Sacco when you suspect something is amiss.

However, the critical thing is to invest in a long-standing reputable Sacco with an excellent track record.

5. Poor Management

Poor management has sunk many Saccos to bankruptcy. The management team might be conmen and can transfer your savings into their personal accounts and make run for it. Of course this is possible, but not the case with most long standing reputable Saccos. Again, the most important thing is to do your thorough homework about the Sacco you would like to join.

Laconically it’s not all doom and gloom in regards to joining Saccos, like its purported to be these days. Saccos have aided many to pursue their dreams and achieve their long term goals.