1.You make money in two ways:
Share capital;You buy shares of the SACCO, then earn dividends annually depending on how the SACCO has performed in the markets.
Interest on deposits(rebates)_ – This is the interest your savings earn.
2.What should you optimize for?
For most SACCOs, the dividends yield is higher compared to the interest on deposits.
Hence, to make more money, it would be wise to buy more share capital.
However, this comes with a little bit or risk since in case you want to exit the SACCO, you will be forced to sell your shares.
Most people do so at a discount hence incurring some losses.
3.SACCOs as Credit Avenues.
SACCOs are widely used as credit avenues due to their friendly terms.
You can borrow 3-5 times your savings and you do not necessarily need collateral for your loan.
4.You need guarantors to access credit.
If you don’t have enough savings to secure yourself a loan, you need guarantors.
These are people with savings worth more than the value of the loan you are asking for.
It is therefore advisable you join the same SACCO as your friends, relatives or work colleagues
So that you can easily get guarantors.
However, be cautious before you act as a guarantor to somebody’s loan.
If you are not ready to clear the loan in case they default, keep off