How to Choose the right SACCO

Co-operative societies, commonly known as SACCOs, have a rich history in Kenya, dating back over a century. Initially established as exclusive entities catering to specific groups, SACCOs have evolved into mainstream financial institutions offering a wide range of services to the public. With the abundance of SACCOs available, choosing the right one requires careful consideration of various factors. Here’s a detailed guide on how to choose the right SACCO to meet your financial needs:
- Reputation
Before committing to a SACCO, conduct thorough research on its reputation and credibility. Check how long it has been in operation, any red flags or complaints, and reviews from existing members. Legitimate SACCOs are licensed by the Sacco Societies Regulatory Authority (SASRA), assuring compliance with regulatory standards. Additionally, seek recommendations from friends, family, and colleagues who have firsthand experience with the SACCO.
- Guarantors and Security
Evaluate the SACCO’s policy on loan guarantees and security. Some SACCOs require guarantors for loans, while others accept collateral. Consider your preference and situation when choosing a SACCO. If you opt for guarantors, ensure you know members who can guarantee your loan. Assess the loan limits and terms to determine if they align with your borrowing needs and financial capacity.
- Technology
Modern technology plays a crucial role in enhancing convenience and accessibility in SACCO operations. Look for SACCOs that offer online banking services, mobile applications, and digital platforms for transactions and account management. Advanced technological capabilities streamline processes and save time, ensuring seamless banking experiences for members.
- Dividends
Compare the dividend rates offered by different SACCOs before making a decision. While most SACCOs distribute dividends to members based on their shareholdings, the rates may vary. Consider the potential returns on your investments and prioritize SACCOs that offer competitive dividend rates. Higher dividend rates can significantly impact your savings and overall financial growth in the long term.
- Investment Opportunities
Explore the investment opportunities provided by SACCOs beyond traditional savings and loans. Many SACCOs have investment subsidiaries offering diverse options such as real estate, stocks, and bonds. Evaluate the range of investment products available and assess their suitability based on your financial goals and risk tolerance. Opt for SACCOs with credible investment channels licensed by regulatory authorities for added security and reliability.