Finances: 10 Pros And Cons Of Joining A Sacco

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Joining a Sacco has been a refuge for people from all walks of life. It is estimated that they contribute to approximately 30% of Kenya’s GDP. They are, therefore, a huge shaper of Kenya’s economy and a reliable source of loans for mid to low-income earners in Kenya. However, it’s hard to ignore the controversies surrounding many established Saccos. Whether it’s bad investments or falling for conmen, joining one has its fair share of risks as well. If you’re planning on saving with a Sacco, here are some things to take into account.


  1. Accessible loans

A Sacco offers easy loans to its members with very low-interest rates. Compared to banks, these loans are processed faster and have fewer requirements. For instance, in Sheria Sacco, applicants only need to be members and have a minimum monthly contribution for a development loan.

  1. Saving Culture

Joining a Sacco helps young people cultivate a saving culture. Instead of spending the Ksh 1,000 frivolously, they can deposit in their Saccos. This also increases their borrowing capabilities thus enabling them to make more developments in life. Dues to bank’s strict policies, it’s harder for young people to save with them.

  1. Community-Based

A Sacco belongs to its members. These members are usually people you can identify with. There’s no classism in Saccos and you can feel comfortable interacting and sharing your challenges thus building each other up. Saccos like Matatu Sacco are able to help you with your matatu business.

  1. Limited Liability

If the worst scenario happens and your Sacco goes bankrupt, what happens? Well, members are only liable to the extent of their contribution. This means that your personal property is exempt from attachment.

  1. Dividends

Saccos pay out dividends to their members at the end of every financial year. Depending on the interest on deposit and dividend on share capital,  members receive their dividends 2 weeks after approval. This depends on your Sacco’s financial performance that year since the higher the balance, the higher the dividends.

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  1. Poor Management

Many Saccos go under because of bad management. The representatives embezzle funds or make bad investments which bankrupt the Sacco. Saccos are more vulnerable to bankruptcy since they don’t have other institutions to bail them out.

  1. Conmen

Whether this is done by legitimate agents or not, some Saccos prey on the naivety of Kenyans to con them. For instance, the Ekeza Sacco recently came under fire after members complained they couldn’t get loans from the Sacco. It was later discovered that the proprietor had transferred billions into his personal account.

  1. Limited Resources

Unlike banks where you can borrow loans in the millions, many Saccos can only manage loans in the hundreds of thousands. Therefore, members are limited to small loans and smaller investments as a result.

  1. In-house Wrangles

Trust me, you don’t want to get caught in the politics of a Sacco. Things can get messy. However, Saccos rely on its members’ co-operation for it to succeed. Such disputes impede the Sacco’s and members’ progress.

  1. Lack Of Accountability

We’ve seen members left stranded after a Sacco goes under. Unlike banks, there’s no way for Sacco member to recover their money. The wises thing to do is to withdraw your money when you notice something suspicious. Therefore, it is important to make sure you invest in a reputable Sacco that has a history of being run well.

Want to reach your savings goals? Here are Tools To Enable You Save More This Year

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I am a creative writer and blogger with interests in lifestyle and fashion. I have previously worked in the scriptwriting industry and I am looking forward to new experiences. My biggest fear is a wearing the wrong shade of foundation