“A penny saved is a penny earned,” said Benjamin Franklin. Many of us are familiar with this saying right from our childhood. However, evidence suggests that few people actually heed this advice. According to George Ototo, the Group Managing Director of KUSCCO Ltd, saving while you are still young, active and productive is a smart financial move. Learning how to ensure you are financially secure is one of the most important things you can do in your life. With a plan and commensurate discipline, it is achievable.
It is crucial for the youth to start saving a small amount of money regularly from their first pay slips or businesses, as they will be more financially secure rather than saving a larger amount later in life.
Over the years, Savings and Credit Co-operative Societies (SACCOs) have risen from being rural-based financial institutions to organisations with loan books that translate to billions of shillings. They play an important role in uplifting lives across the country through financial inclusion.
SACCOs have made access to finance easier for both households and micro, small and medium enterprises (MSMEs).
For this reason, the government has taken steps to anchor co-operatives as a key pillar in the economic transformation. The government is repositioning the country in all sectors through a co-operative movement, aiming to improve savings, financial deepening, and, more importantly, make SACCOs become the way of life. Major steps have been taken to improve governance, enabling SACCOs to gain public confidence and trust.
As an inherently democratic institution, SACCOs exist to emancipate their members economically. Here are reasons why you need to save in a Sacco now!
Compound Interest
Saving in a SACCO allows your money to earn interest on deposits, whose rate is ratified by members at the annual general meeting, depending on the SACCO’s financial performance. Thus, rather than cashing in on your interest, you re-invest it into your savings, which causes it to grow over time. The interest added on top of that interest is known as compound interest. This means that the longer you save, the more you benefit. A wise man once said, “Money makes money, and the money that money makes, makes more money.”
Accessible loans
The SACCO model espouses savings and credit. You should join SACCO because they offer members loans at affordable and stable rates. They also have a wide variety of loans; for instance, emergency, education, SME/business loans, and housing, among others. Acquiring loans has also been simplified and digitised in many SACCOs through mobile banking.
Investment projects
The SACCO business, like other financial institutions, thrives on the trust and confidence of the depositors. A SACCO is owned by its members, who buy shares in the entity. This offers solidarity, community and collaboration among members to solve their socioeconomic problems.
SACCOs pull together their members’ savings and invest them in joint projects such as land or houses that members can purchase at reduced rates. Dividends are also paid to members at the end of every financial year, depending on SACCO’s financial performance.
In a nutshell, Saccos provide asset financing facilities that promote investment; they promote a highly disciplined savings culture, and members can easily access low-interest loans and invest in Sacco joint projects.
Do not wait for tomorrow. #JoinaSACCO and save now! The benefits you will reap later in life are worth the effort it will take you today.
