Saccos are becoming increasingly popular in Kenya. More people are turning to Saccos as a source of loans and dividends.
Do you require decent returns on your investment? Do you have a full-time job yet need extra money?
Have you gotten large sums of money for which you can’t decide what to do with them right now and are afraid of embezzling it? Don’t be concerned. I’ve got an answer.
Bank savings, insurance policies, and fixed deposit accounts are not the ideal investments for you, but rather business-making catchphrases.
Undoubtedly, the benefits associated with Saccos, such as dividends and loans, may interest you. However, with so many Saccos to choose from, it might be tough to find one that can grow your money.
To help you decide, we’ve compiled a list of the finest Saccos in Kenya based on dividends and return on share capital.
This is one of Kenya’s oldest Saccos. It has branches in Nairobi, Eldoret, Kakamega, Nyeri, Kisii, Nakuru, Meru, and Mombasa, and was formed in 1972. This Sacco has approximately 60,000 members.
It pays 10.5 percent on savings and 17 percent on share capital in dividends.
Furthermore, the Sacco offers a fixed deposit account with variable interest based on the amount of money saved. For instance, if you save between Sh. 10,000 and Sh. 49,999 for a year, you will get 7% interest, or between Sh. 700 and Sh. 3,499.
If you save between Sh. 200,000 and Sh. 1 million in this fixed account, you will earn 8.5 percent interest, or between Sh. 17,000 and Sh. 85,000. Their highest fixed account interest rate is 12% on deposits of Sh. 10 million or more.
Members of the Sacco can borrow amounts equal to their savings if they do not have guarantors, and amounts greater than their savings if they do have guarantors.
This Sacco society has 140,000 members and is headquartered in Nairobi. Nairobi, Mombasa, Kisumu, Nakuru, Ol Karia, Eldoret, Kawi, and Embu have Sacco branches.
The Sacco paid dividends at a rate of 14 percent on share capital and 10.5 percent on savings in the 2019 fiscal year. Alpha deposits are the name given to the company’s savings plan.
It is aimed at individuals, groups, and corporations. This bundle enables users to save money on a monthly basis indefinitely.
However, savings in this account can only be accessible following withdrawal of membership.
The headquarters of this Sacco are at Ol Kalou Town, Nyandarua County.
It operates out of Nairobi, Nakuru, Nyahururu, and Laikipia. The Sacco began as a teachers’ cooperative organization in Nyandarua County before becoming open to the entire public.
It has been promoting an investment campaign in which investors can contribute and receive a 20% return on their capital over a five-year period.
This share offer has been selling at Sh. 100 per share, with a 1% bonus for purchases of Sh. 150,000 or more.
The Sacco paid out dividends at a rate of 13% for the entire fiscal year 2020, which ended in February 2021.
Shareholders can take out immediate loans against their locked funds through the Sacco.
Nairobi, Kisumu, and Mombasa are the locations of this Sacco. Mhasibu pays 8.15 percent interest on deposits. It distributes a 15% dividend on its share capital.
The minimum share capital with which you can invest is Sh. 10,000. You can contribute Sh. 1,600 every month with a share deposit.
Mhasibu takes securities as collateral for loans in the form of deposits, guarantors, and unit trusts.
If you ask for a loan at this Sacco and offer to secure it with your logbook, the Sacco will only grant you half the entire amount.
Key Points From Experts
This is what you should look for when looking for a Sacco:
- Bylaws: Read the bylaws and understand how the Sacco you are interested in operates. Bylaws should answer questions such as how to exit, how to sell your shares, costs involved if you want to exit or swap shares. They should also tell you what will happen if you fail to pay the minimum monthly contribution. In most Saccos, the share capital is not withdraw-able but can be sold or transferred to an existing member upon your withdrawal from a Sacco.
- The return on investment: Know what returns on average you should expect to get. If your money is locked for a year, how much interest will it earn? What value will you get if you invest in the Sacco’s share capital?
- Membership diversity: If a Sacco was started by teachers or farmers, how far has it gone in creating diversity? The best Saccos have a diversity of membership. Don’t go for a Sacco that is exclusively run by one category of people.
- Long term value: This includes your ability to get credit from a Sacco. Get in a Sacco where you know people who can guarantee you loans if need be. You should also look at whether a Sacco offers secured loans.
- Management: Check out how the Sacco is operated. Look at the board members and how past decisions and policies have been executed. Also look at the Sacco’s liquidity ratio to see the amount of savings versus disbursed loans. See where and how deposited funds are invested. Find out if the Sacco offers full disclosures on accounts and loans or not.
- Automation: Don’t go for a Sacco that will require you to travel all the way to its headquarters to sign withdrawals or make a share swap or apply for a loan. Go for a Sacco that has automated its operations and accepts automation items such as standing orders.