Factors to consider when joining a sacco


Saccos are revolutionizing people’s perception of savings, applying for loans, and future investments. Over the years SACCOs have proven to be very flexible and reliable for the common “mwananchi” whereby they can save regularly and get speedy loans in desperate times. Before joining a Sacco, consider the following:

For one to be grunted membership in a particular Sacco, you will be required to pay a registration fee which facilitates an account creation and buy some shares. Each Sacco has a minimum share capital which a member can pay for through deductions based on monthly installments.

All contributions should be done on a regular basis. Unlike other saving firms whereby any amount can be given during any unspecified time, Saccos do not operate this way. The members’ contributions are strictly a stipulated amount depending on the bylaws governing the Sacco and should be given within a specified duration.  All Saccos have a minimum amount that members can contribute.

3.Laws pertaining to monthly installments.
Saccos have stipulated rules that tend to maximize the amount of money coming in and circulating among members through loans. For one to be able to access the money they have channeled into Scacco’s they will have to take a loan or terminate their membership.

4.Laws pertaining to Loan application and approval.

For one to apply for a loan one must have a guarantor who will be liable in case you default to pay the loan. All guarantors must be members of the society to facilitate easy repayment of defaulted loans. The guarantors’ accumulated deposits should be equal to the loan you are applying for. In case you default in re-paying the loan the grantors’ deposits will be seized until you settle the debt.

When applying for a loan, the amount you are eligible to be subject to the total amount of monthly deposits you make. Some SACCOs will allow members to borrow twice or thrice more than what they have saved. Loans are also processed within thirty minutes to twenty-four hours depending on the urgency.

5.Loan repayment.
Upon approval of a loan, you will be required to repay the loan over a given period of time with a specified interest rate. You will be required to continue making monthly deposits with no-fail because loan repayment is normally considered separate from your monthly deposits.

6.Default of loan repayment.
One is advised whenever they borrow money, they should have a proper cash flow to facilitate settlement of the debt.  Saccos have a standard policy that members should always pay back their debt failure to which will lead to termination of membership.

7.Termination of membership.
When a registered member wants to leave a Sacco, they will be required to write a letter addressed to the committee or the office administrator. An investigation process will then be conducted to ensure the member does not owe the Sacco anything. Depending on the findings a clear calculation of the members’ dues will be done. If a member owes the Sacco, they will have to come up with a payment plan and if the Sacco owes the member, they will facilitate the payment.

8.Role of Guarantors.
A guarantor is someone who agrees to clear someone else’s debt should they fail to facilitate payment. When a member is selected as a guarantor, they will be fully responsible to ensure the borrower pays back what he owes. In a scenario whereby the borrower fails to pay the debt, the guarantor will be liable to clear the debt. Some Saccos allow the borrower and the guarantors to have a seat down and come up with a payment plan should the borrower encounter a challenge.

With this information in mind, I am confident that you will be able to select a Sacco that suits your needs.