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Some people have lost their money in Sacco that have cheated people of their savings. To begin with Sacco are great initiatives that have seen many people they save their money and access the loans at cheaper rate of interest to follow their dreams and aims such as building a house, starting or expanding a business.
If you have lost your money before, you may be wondering, is my money safe with a Sacco or not? Well yes – mostly. You simply required to understand how to secure your money whilst saving in a Sacco. If you play your cards right, the Sacco can be your best financial partner.
Note that your Sacco savings will raise as you make offers. You can set a fixed amount of money to save into the Sacco every month. Your savings, receive your rewards at the end of the year. And it’s not peanut rewards like those for the stock market, it’s relatively cash. Keep in mind that, loans have no effects on the rewards you’ll receive, or how your rewards are calculated.
One thing you required to known about in Sacco’s is something called share capital. Share capital, in the simplest terms, means that the amount you deposited in to buy shares in the Sacco. It’s similar to a non-redeemable token into a club. Most of the Sacco’s will have a standard amount of share capital for all the members; no member will have the more shares than the next. Share capital is also means that, when you decide to come out of the Sacco, they’ll provide your contributions back but they’ll keeps your share capital. Keep in mind that share capital amounts will vary from Sacco to Sacco. For Example, the share capital for Sacco A is Sh10, 000. The one for Sacco B is Sh20, 000.
It’s very important you to understand that the share capital values doesn’t directly translates to the financial health of the Sacco. Saccos A has a powerful balance sheet and has more members than Sacco B.
Always keep in mind that once you deposited your cash into the Sacco, the only way to gain the access to it is either through a loan or all together if you come out of the Sacco.
This can be a big problem for you as the goal of joining a Sacco is to secure and access loans at low rates of interest. You will therefore required to join a Sacco with at least group of five people you know well so that you can give assurance to each other when you required a loan. Keep in mind that, to be a guarantor there is a big risk because suppose of default the guarantor carries the debt burden. The problem of being a guarantor is guaranteeing someone who is unable to make their repayment for monthly loan. The Sacco will give them three months time before they start to reclaim their money. Suddenly you’ll see your savings reducing by the month because they will start taking care of someone else’s loan. Until the debt is cleared, the Sacco seizes the guarantor’s savings deposits and if it is not you can end up by losing your savings. This is only one way where you can lose your money in the Sacco. Be careful for the people you have given guarantee for the loans, as if they don’t make a repayment, the Sacco will take your money to cover for the defaulter.
Each Sacco has rules and regulations which every one follows such as when you want to join or come out from the Sacco. Familiarise yourself with the terms and conditions of being a member of the sacco and how you can certified for a loan. Also learn other rules and conditions such the rate of interest earned on rewards, the acceptable securities for a loan and even the kind of loans they offer, among others. Take your time, do your research before joining a Sacco and do your ground work so that you don’t risk losing your cash to a rogue Sacco.
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