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saccos vs investment cooperatives
deadpoet
#1 Posted : Thursday, February 11, 2016 2:06:42 PM
Rank: Member


Joined: 9/27/2006
Posts: 496
Wazuans, which is the better alternative if someone was to choose one? For example, why would one choose stima sacoo over stima investment cooperative?

What would be the pros and cons of either?
Stract_Consulting
#2 Posted : Thursday, February 11, 2016 3:01:26 PM
Rank: New-farer


Joined: 6/3/2014
Posts: 58
Location: Nairobi
deadpoet wrote:
Wazuans, which is the better alternative if someone was to choose one? For example, why would one choose stima sacoo over stima investment cooperative?

What would be the pros and cons of either?


It's not a like for like comparison. A SACCO mainly is used for loans and saving. You save for a number of months, you are granted a loan based on your savings, typically 3 times your savings, and normally this loan is guaranteed by fellow members. At the end of the year, you earn dividends and interests on your savings in the SACCO.

An investment cooperative on the other hand is an extension of a SACCO in terms of governance, such as one man, one vote etc but then, is a place where you give them money, they buy plots (or carry out other investments activities) with it, sell it to members or non members alike, make some money and share with you some dividends at the end of the year. Typically the return on investment cooperative is higher than that of a SACCO because in a SACCO you benefit by having cheaper loans, normally at 12% p.a.

We normally track this sector on our blog whose link is here
Be ignorant and ask a few questions - Peter Drucker
Pirate
#3 Posted : Thursday, February 11, 2016 3:35:26 PM
Rank: Member


Joined: 4/4/2007
Posts: 91
deadpoet wrote:
Wazuans, which is the better alternative if someone was to choose one? For example, why would one choose stima sacoo over stima investment cooperative?

What would be the pros and cons of either?

Oranges and Apples ...
They are complementary products and work hand in hand.

A SACCO allows you to SAVE and get LOANS up to 3X your savings at an interest of 12% P.A. Significantly better than banks with guarantors as collateral.

An Investment Cooperative is a vehicle for engaging in land, real estate, agribusiness etc, which are sold preferentially to members and non members. Members also benefit from dividends yearly depending on performance .

hence one can borrow relatively cheap loans from SACCO and leverage on land purchase, shares ( which yield high returns) from the investment cooperative
Knowledge is power , but action gets things done ...
deadpoet
#4 Posted : Thursday, February 11, 2016 3:46:48 PM
Rank: Member


Joined: 9/27/2006
Posts: 496
Cheers guys, and nice work on your blog @Stract_Consulting
Stract_Consulting
#5 Posted : Thursday, February 11, 2016 4:12:33 PM
Rank: New-farer


Joined: 6/3/2014
Posts: 58
Location: Nairobi
deadpoet wrote:
Cheers guys, and nice work on your blog @Stract_Consulting


Thanks...
Be ignorant and ask a few questions - Peter Drucker
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