Investing in a SACCO is a smart decision for young adults. SACCOs offer various benefits, including higher interest rates, lower loan interest rates, and a sense of community. By becoming a member of a SACCO, young adults can build their savings, access affordable loans, and network with like-minded individuals. Joining a SACCO is a long-term investment that can pay off in the future, making it a wise choice for any young adult looking to secure their financial future.
Savings and Credit Co-operative Societies (Saccos) are helping young people improve their economic status. Saccos are innovating their products and services to suit young entrepreneurs while allowing them to participate in decision-making actively.
The urge to splurge cash on secondary needs often drives youth away from saving. Many young people spend more than savings, yet saving is critical for investment.
Young people are likelier to make poor investment decisions or overspend on unnecessary things. The Sacco business model works well for youth eager to change their economic well-being, create wealth, and secure their future. Saccos are built on affordability and accountability.
Saccos also operate under the co-operative principles that require them to educate and train their members, particularly young people, about the nature and benefits of cooperation.
A Sacco Subsector Demographic Study Report released by the Sacco Societies Regulatory Authority (SASRA) a few years back indicated that the youth are increasingly involved in Sacco activities, which has in the past been perceived as a preserve of the old.
The youth, the population of members constitutionally defined to be within the age brackets of 18 years to 35 years, accounted for 30.86 percent of the total DT Sacco membership, which was nearly a third of all members. “This demystifies the public rhetoric that Sacco membership has no place for the youth,” the report read.
Saccos are the place for the youth. The report unpacked the age distribution and gender composition of the members of deposit-taking Saccos in Kenya.
Overseas Co-operative Development Council (OCDC) report indicated that 97 percent of co-operative members have significantly improved their financial situation. The report titled Ground Up: Partnering with Co-operatives on Locally-Led Development also indicated that members of co-operatives earn higher incomes than the national average and lead to improved economic well-being compared to non-members.
One of the greatest benefits of joining Saccos for youth is mastering the art of saving and eventually investing. Getting started with investing early enables one to change their life financially. The later you are to the party, the more you’ll struggle to catch up.
Saccos are priceless savings and credit extension avenues, yet quite a number of young people are yet to embrace them. For some, commercial banks are more appealing.
Youth desire instant things. With a pay slip, a young person can easily get a loan from the bank. Although it is also possible to access similar instant loans from Saccos, a Sacco will require savings regularly or saving for a few months before accessing credit.
There are more benefits to saving and accessing credit for Sacco members. A Sacco member makes and eats their cake. By being a member of a Sacco, you are a shareholder. You earn a dividend as an owner and interest on deposits as a shareholder.
On the other hand, banks make billions in profit using your savings, but you get nothing from that.
As a Sacco member, you are eligible for election into the Board of Directors or as a delegate. Anyone can become someone in a Sacco. The number of young people occupying leadership positions in Saccos is gradually growing.
Saccos operate on the trichotomy of member-owned, member-managed, and member-customer concepts; the more members a Sacco has, the more customers it will have.
According to the International Co-operative Alliance (ICA) definition of Co-operative enterprises, Saccos as co-operatives are member-based financial institutions that strictly serve their membership.
Therefore, Saccos operate on the trichotomy of member-owned, member-managed, and member-customer concept; the more members a Sacco has, the more customers it will have.
In banks, customers remain customers without a chance of rising to an administrative level.
According to Mr George Ototo, KUSCCO Group CEO and Managing Director, Sacco has more than just loans. Sacco members are regularly trained. There is also social support.
In most cases, Sacco’s interest rates on loans are lower, promoting businesses’ growth more than other financial institutions. Sacco members are thus more stable even in times of crisis like it was during the COVID-19 pandemic outbreak.
According to Peter Ngugi, Chairman of Tower Sacco Ltd, the number of young people joining the Sacco has been on the rise. “We have been able to increase over 28,200 members in eight months. We are keen to bring on board more young people to support them achieve financial freedom gradually,” he said.
Like in any other business, there are bad apples in the Sacco subsector. The success of Saccos has attracted fraudsters. Young people wishing to join Sacco must do due diligence and ensure that they are not defrauded in a Sacco. The promise of high returns should be a red flag. It is wise to ensure that the Sacco is licensed and regulated by SASRA before investing your money.
With technological advancements, Saccos are changing, offering better banking experiences anytime and anywhere. Saccos are the future. Young people will benefit more by joining Saccos, as many have testified.
