During the 101st Ushirika Day Celebrations held at the KICC on July 1, 2023, President William Ruto announced that the government is committed to strengthening cooperative societies by formulating favourable policies and establishing a central liquidity facility to enhance the efficiency of Savings and Credit Cooperative Societies (SACCOs). He went on to add that the policies would also facilitate short-term inter-SACCO borrowing and grant access to the national payment system. With the vibrant co-operative culture in the country, Kenyans need to leverage the growing cooperative sector to enjoy the financial empowerment associated with the SACCOs, such as access to affordable credit, higher returns on savings, and financial education.
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One of the most significant advantages of SACCO membership is access to affordable credit. Traditional financial institutions often have stringent lending criteria and high interest rates, making it challenging for many to secure loans. SACCOs, however, operate on the principle of mutual aid, allowing members to borrow at lower interest rates based on their savings and creditworthiness. This access to affordable credit can be a lifeline for small businesses and individuals facing financial constraints.
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SACCOs offer attractive interest rates on savings accounts compared to commercial banks. Since SACCOs are member-owned and not profit-driven like banks, the surplus generated from their operations is distributed back to the members in the form of dividends or higher interest rates. By becoming a SACCO member, individuals can watch their savings grow at a faster pace, helping them achieve their financial goals sooner.
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SACCOs promote financial literacy and education among their members. They conduct workshops, seminars, and training sessions on financial planning, budgeting, and investment strategies. By participating in such programs, members gain a deeper understanding of managing their finances and making informed decisions. This empowers individuals and businesses to improve their financial well-being and create a secure future.
In SACCOs, every member has a voice and voting rights, regardless of the size of their savings or investments. This democratic structure ensures that decisions are made collectively and in the best interest of all members. As a result, SACCOs are more responsive to the needs and aspirations of their members, fostering a sense of ownership and belonging.
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SACCOs provide a suitable means of achieving financial stability, growth, and empowerment. As these member-owned institutions continue to evolve and expand their services, they are destined to play a significant role in fostering inclusive economic growth and prosperity. With the support and goodwill of the national government, SACCOs are poised to play a significant role in the formalization of informal sector players and entrepreneurs, fostering inclusive economic growth and prosperity.
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