Finding the best place to save money for Kenyan entrepreneurs could be difficult especially when it comes to comparing SACCOs and Banks.
When choosing banks to save in, it is important to consider the type of bank to save in, you could end up banking with one that will collapse and leave you devastated. Choose banks that do not heavily rely on deposits made by customers to run their operations. Some of the banks I would suggest include Equity bank, Kenya Commercial Bank and Cooperative bank among others.
The advantage of banks is that loans are readily available and higher amounts can be lent depending on collateral or savings. Banks also allow easy access to money since they have ATMs and now have mobile money transfer.
However, banks have very high-interest rates that may go high during reappraisals and a loan could, therefore, have different interest rates within its lifespan. This is hence unreliable since clients may pay very high interests on loans.
Banks also include some more charges on their loans such as Account maintenance commission, Accrued Interest charges, Processing fee and insurance fee. Furthermore, the paper work for getting a loan is also very cumbersome.
On the other hand, SACCOs are good for investing money in. You should ensure that before joining SACCO, it is established, registered and has been in existence for at least a considerable number of years.
Some of the existing SACCOs are Stima, Harambee, Mwalimu and many others. Most of the SACCOs belong to institutions. The greatest advantage of choosing SACCOs over Banks is their low interest rates and share owning. Their loan rates are constant over the loan’s lifespan and they do not have some extra costs charged to obtain loans.
Research is an important step that should be done before choosing a bank or a SACCO. With this information, it is easy to decide where to save and invest your money.