Search for Savings & Loans
How to Build Wealth in Kenya Using Saccos
How to Build Wealth in Kenya Using Saccos
See The Best Loans Available in Kenya Today
Money Management

How to Build Wealth in Kenya Using Saccos

Ian Job
September 5, 2022

Is a Sacco still a suitable investment vehicle in this age and era? Regardless of the changing face of savings and loan facilities, people still look for a client-friendly financial institution with easily accessible systems and processes. 

Saccos, just like banks, offer financial services but with a nice twist to just about everything on the table. As an inherently democratic institution, Saccos looks to emancipate its members economically.  And by courtesy of your membership, you play a crucial role in deciding who takes the leadership mantle.  

Cooperative societies also play by the shareholding rules, where your shares and savings provide a throughway for loan facilities. You can also access assured annual dividends, a worthwhile Return on Investment (ROI). 

Here's how Saccos can help you build wealth. 

Read Also: Saccos in Kenya: To Join or Not?

1. Saccos Promote a Highly Disciplined Savings Culture 

If there is anything many people are not so good with, it's keeping to a systematic savings plan.

Sacco membership rules demand that to remain within; you have to regularly and consistently contribute to your savings. There is a specified minimum amount, which enables each member to set aside a monthly savings goal.

How can a savings structure help you to build wealth? 

As a member, you can invest your savings. Placing your money in asset acquisition can be one of the most prudent ways to grow your money and, ultimately, your wealth. Again, you are at liberty to choose an investment plan that works best for you. 

Some savings accounts can earn you high interest on your deposit. However, you can also branch into investment portfolios like real estate, stocks, treasury bonds, or a retirement account. With good risk management, your investment can earn excellent returns and help you build your wealth gradually.

You may also have to upgrade your earnings to maximize the amount you save. It's a trickle-down effect that enables one to invest more and build even more wealth. 

Read Also: How To Turn Your Savings Into Investments

2. Saccos Provide Asset Financing Facilities That Promote Investment 

A huge benefit for many Sacco members, rare in mainstream banks, is friendly asset financing facilities. You can easily buy a vehicle, build residential/ commercial properties and own land courtesy of your Sacco membership.  

The main catch about this financing arrangement is the low-interest rates on the loans, which means you avoid any future debt burden. Instead, you continue to save and build your investment portfolio.  

For your investment to grow, you need help, which is where Saccos conveniently come in. This financial loan type is readily available if you need the latest machinery or technology. 

Suppose you want to build a commercial building or buy land. You can access the funding from your Sacco. As you repay the loan, your investment keeps appreciating. It's a win-win situation that promotes excellent returns over time. 

3. Members Can Easily Access Low-Interest Loans 

Many Kenyans take loans and some grapple with the burden of high-interest loans that lead to an even enormous debt burden. Enter Saccos, and the story changes.

Saccos generally charge members fairly lower interest rates (averaging at 1% per month) as compared to other financiers such as commercial banks and micro-finance institutions. The advantage is that you can save more and invest more. Unlike most banks, the borrowing rate in Saccos is predictable, so you can plan in the long term.  

You can easily manage repayments and, more so, have peace of mind knowing that nothing will change over the repayment period.  

Saccos, unlike banks and other lending institutions, adapt and design each saving and borrowing plan to a member's ability to pay. As a result, it is simpler to borrow and save at the same time. It is also easy to invest and accumulate wealth without difficulty.

Low-interest loans permit you to grab those ever-elusive investment opportunities. The money that would have gone into debt resettlement goes into asset acquisition, building a strong and profitable collection of financial assets. 

4. Annual Dividends Are an Excellent ROI (Return on Investment) 

Some of Sacco members' most excellent investment strategies include reinvesting their annual dividends, meaning, more shares. Dividends can also provide an avenue by which you enjoy a regular income without devouring your savings. 

Here are some of the ways you can invest your dividends:

  • You can reinvest them by purchasing more shares from your Sacco.
  • You can divert them by buying shares in a different Sacco.
  • You can create a separate high-interest savings account, enabling you to earn handsomely from the dividends alone.

The beauty of dividends is that it doesn't matter how Saccos and the economy, in general, are performing. It's a guaranteed payment that will continue appearing in your account annually, depending on your shares. More shares equal a tidy sum of money you can save or reinvest. Once you prudently diversify your asset portfolio using dividends, you can access reliable income over time. 

Read Also: Windfall: Sacco Members Reap Big in 2021 Dividends

5. Saccos Can Give You a Secured Loan at Three to Five Times Your Shares. 

Although you will need guarantors to secure a loan with your Sacco, the good thing is that, unlike banks, you can access triple or more the amount you have in shares. 

Many people use these loans to pump into investments. From building commercial properties, boosting an existing business, and even buying land and constructing residential houses. And since these are low-interest loans, you do not feel the heat so much once you begin to repay. 

A prudent long-term investment plan is all you need to benefit from such loans. And before long, you will have diverse assets that translate into an admirable wealth portfolio. 

Before you borrow, read your Saccos bylaws and understand its fine print. Some Saccos restrict members from securing loans with them if you are an active member of a different Sacco. 

6. Members Can Join and Invest in Sacco Joint Projects  

Most Saccos have joint investment projects that can also be the key to building individual wealth. 

How do these systems work? It's pretty simple. Saccos, through their deep-rooted cooperative movement beginnings, encourage the concept of togetherness among their members.

It is about pooling resources and launching income-generating investment enterprises. They can, however, invest in real estate and have members purchase at low-interest rates.


The time-tested strategy for building wealth is to consistently save money, make investments, and wait patiently for that money to grow over time. Starting little is acceptable.

If you can regularly save money and invest it, what stops you from accumulating wealth?

Ian Job is an articulate writer with over four years of experience in SEO writing, digital marketing and screenwriting. Away from writing, he's probably producing an indie movie if you don't find him mentoring upcoming content writers. You can connect with him on Medium.

Download the new Money254 App and don’t miss out on the next article.

Join 1.5M Kenyans using Money254 to find better loans, savings accounts, and money tips today.
Get it on Google Play

Learn more about Personal Loans available in Kenya on Money254

Money 254 is a new platform focused on helping you make more out of the money you have. We've created a simple, fast and secure way to find and compare financial products that best match your needs. All of the information shown is from products available at established financial institutions that our team of experts has tirelessly collected.

Instantly search loan products from established providers in Kenya and compare on the terms that matter most to you.
Find the best Personal Loans for me

Don't miss another article - download the new Money254 App Today

Get it on Google Play

Sign up for our newsletter and get weekly money tips to your inbox.

Get updates from the Money254 team on financial news and new Money254 features.
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.