How Kenyan Saccos Can Make More Money and Increase Dividends

(Last Updated On: May 21, 2014)

sacco in kenya

Some saccos in Kenya have been experiencing reduced amounts or stagnant dividend growth year after year. This is despite increase in number of members.

So how can members of a sacco earn more money from dividends?

1. Sacco members can only earn more if members borrow more then pay interest on the loans. If the members just save without borrowing the whole sacco won’t earn any profit.

 

2. Members should have better financial goals

Most of the people who join saccos don’t have any clear investment plans in future. This leads to borrowing controlled by impulse and emergencies. This leads to the member having no clear-cut method for paying back the loan which may lead to defaulting of the loan. Members should have clear investment plans before joining the sacco.

 

3. Educate members on how to efficiently use loans to create wealth

People who use loan facilities without a proper way to pay back or earning a return on it often end up defaulting. This leads to loss of possible future dividends. Each member should be equipped with more knowledge on how best to use a loan and the different investment and business options they can use.