The Power of a Good Saving Habit - SACCO

The journey to financial freedom is a long one. Opportunities are abound and calling but it requires a keen eye, preparedness, knowledge and discipline to benefit. They say that success is as a result of preparedness meeting opportunity. Preparedness to me is the ability to identify opportunities and take advantage of them. This can only be achieved by having knowledge and capital. This post will dwell on capital from savings.

The most reliable source of capital is personal savings. It never fails you and neither gives you timelines, it’s at your disposal. A saving culture should be natured from your first earning. It is sad that as youth we target a certain amount to qualify our resolve to save but it doesn’t matter how much you put aside but SAVE! Saving enables you to have reserve capital and when your dream idea is hatched you invest, it also empowers you to bargain for more funding, do not invest money as you get it, invest as you get ideas and this minimizes number of failed start ups!

A good saving plan is not cast on stone but there are proven ways of saving. I will dwell on my personal favorite, SACCO. This is a gem that those who complain of exorbitant bank and micro-finance interest rates fail to realize. The truth is banks are robbing the masses, not unless you own the bank through shareholding or enjoy other bank services, keep off banks at all cost.

The pros of a good Sacco include a yearly dividend, average performing Sacco’s give up to 6-10% returns. Banks give 4% on a year’s savings. But the icing on the cake are SACCO loans, most of them give loans up to 4 times your savings, the least is 3 times your savings. SACCO charge a modest interest on loans offered because they are not driven by profit making but benefiting their members. Their interest range from 8-12% on a reducing balance while their distant relatives in terms of benefits, banks and micro-finances charge up to 19-22%. The only security required is other members to guarantee you, banks require collateral if you don’t have a fixed income. SACCO’s offer a range of loans from developmental to recreational loans.

Do the math’s if you are saving 2,500ksh monthly, you save 30,000ksh in one year. In one year you qualify 120, 000ksh at 4 times your saving from your SACCO no need for title-deeds and other collateral.

To select a good SACCO you need one with a good integrity record. Join a SACCO related to your industry this way your peers can give you more information on the society and they can come in handy as guarantors when you want a loan. One that has been in operation for long helps you scrutinize their books, financial statements, they can easily tell you how the SACCO is performing. Word of mouth is crucial; people get it right most of the time. But most important SACCOS are now regulated by SASRA. Your SACCO should advice you how to remit savings and their by-laws. By-laws guide you on SACCO operations, how to open accounts, loan types, limits and processing and many other services read them well before you join, some differ. Have you joined one yet you can share your experience!

Good luck on your saving!