Saccos in Kenya are said to be controlling over 1 trillion shillings, almost a third of Kenya’s national budget in terms of contributions from members as well as other investments.
For many years, these co-operative societies have continued to be the safest investment vehicles where individuals could invest their money with assured good returns. Saccos have also continued to be the most affordable avenues for cheap and affordable loans for millions of their members.
The lucrative profits that have been coming with Saccos have brought to the mushrooming of thousands of Saccos across the country recruiting hundreds of thousands of members, the majority of them low-income members.
Kenya has over 22,000 registered co-operative societies, with thousands others unregistered with an estimated 14 million Kenyans as members controlling over 1 trillion shillings in members’ contributions and deposits.
Why People Have Been Preferring Saccos
Most Kenyans, for a very long time, preferred investing in Saccos over other forms of investments. According to most Kenyans, Saccos have the following benefits for their members:
Therefore, the main reasons why Kenyans choose to invest in Saccos are:
Things in the Sacco sector have changed. The sector will soon come to its knees if something is not done to salvage the situation. Most Saccos are now reeling under the massive weight of mismanagement and outright fraud from boards and managers.
Billions of shillings belonging to members in terms of savings have either been lost or at the verge of being lost as more Sacoos continue to run into financial turbulence.
Ekeza Sacco, for instance, is said to have defrauded its members a total of 1.5 billion shillings. Thousands of members belonging to the troubled Sacco are a worried lot even as the government works towards selling assets belonging to the Sacco owner to pay members.
Members in Ekeza were promised good returns in terms of plots, houses, and loans among other benefits upon investments. Thousands of people, mainly from the Central region of Kenya, joined the Sacco, made deposits and within months, the amount was above 1 billion shillings. The founder of the Sacco, David Kariuki Ngare is said to have transferred 1.5 billion shillings to his personal account which he insisted he ‘just borrowed’ to invest for ‘his members.’
Stats show that three Saccos; Mwalimu Sacco, Ekeza Sacco, and Stima Investments Co-operative are estimated to have either defrauded or led to the loss of more than 3.6 billion shillings mostly through mismanagement and corruption by the top management.
Stima Investment Co-operative shocked many Kenyans when it was revealed that members might have lost more than 500 million shillings to mismanagement and corruption. Stima is among the largest Saccos in Kenya and one that has been a preference for many.
It is evident that Saccos are now becoming a risk investment venture where people are setting them up with a goal of collecting money from members and then defrauding them.
According to official records, Saccos employ more than 500,000 Kenyans with 1.5 million others depending on them indirectly. All Saccos combined are estimated to have at least 732 billion shillings in members’ deposits and savings with and base of more than 1 trillion shillings.
What you should look for before investing in a Sacco
Before investing your money into a Sacco, consider the following: