Many young people in our country have feasible business ideas but lack the financial strength to make them a reality.
Those with little capital need more to grow and expand their businesses. The lucky ones who are employed need to save for their future and maybe become self-employed and create more jobs.
To achieve much financial empowerment for the young people, the best choice is joining a good savings and credit co-operatives (SACCOs) for the following reasons among others.
Cheap interest rates on loans
Saccos offer loans to members at very low interest rates as compared to commercial banks. For instance, some banks are offering loans at 18% interest rate or more while some Saccos are giving at a rate of 10% – 12% per annum therefore it is important for you to do your math.
Inspires a Saving culture
Most of the young people tend to spend all they have without sparing some for the future. It is advisable to save now when you are more energetic and more productive. Saccos will assist you to develop a saving culture and be able to commit part of your disposable income for your future.
The accumulated savings also enable you to access credit facility as they act as collateral for loans. The more the savings the more the amount of loan one can be able to access.
Return on investment
Saccos give members dividends on their savings. Dividends depend on the profits made by the Sacco thus the more the savings, the more the dividends you get.
I would rather save with a Sacco than in the stock market because am assured of my savings as opposed to shares if the prices go down.
While repaying a SACCO loan, a member is expected to still maintain the same level of monthly savings as they did before. This builds a saving discipline, and helps one accumulate a substantial savings base
In Co-operative societies members are provided with better services at reasonable prices. The society also provides financial help to its members at concessional rates unlike mainstream banks.
It assists in setting up production units and marketing of produce of small scale farmers.
In most cases, the liabilities of the members of the society is limited to the extent of capital contributed by them. Hence, they are relieved from the fright of attachment of their private stuff, in case the society suffers financial losses or goes bankrupt.