Co-operatives create the opportunity for people to take responsibility for their own financial organisation. The democratic process is an integral part of the co-operative and encourages people to take control of their own financial affairs. Among the many advantages of SACCOs are:

·        Savings are mobilised locally and returned to members in the form of loans. The ideal model invests 80% of mobilised savings to members in the form of loans. The money stays and works within the members.

·        SACCO interest rates on both savings and loans are generally better than rates given by banks and the reason for this is that SACCOs have very low overheads as compared to banks that pay low interest on savings but charge a lot of interest to cover their overheads.

·        SACCOs encourage members to save, essential for economic empowerment.

·        SACCOs educate their members in financial matters by teaching prudent handling of money, how to keep track of finances, how to budget and why to keep away from hire purchases and loan sharks

·        SACCOs pay dividends on shares to their members once the SACCO is established and profitable. Members therefore take pride in owning their own SACCO.

·        SACCOs do not raise equity from outside interests. All money borrowed to members is money mobilised by members. Because its members funds members are committed to paying back their loans.

·        Shares and loans are insured. Upon the death of a member the estate will not have to repay any loans outstanding to the SACCO and the value of any shares owned by the deceased will be repaid double to the estate.

·        SACCOs perform a critical and unique function as financial intermediaries. They mobilise significant volumes of personal savings and channel them into small loans for productive and provident purposes at the community level.

·        SACCOs are members of SACCOL who is a member of the African Confederation of Co-operative Savings and Credit Association (ACCOSCA). SACCOL is also a direct affiliate to the World Council of Credit Unions (WOCCU).

A Savings and Credit Co-operative (SACCO) is a democratic, unique member driven, self-help co-operative. It is owned, governed and managed by its members: working for the same employer, belonging to the same Church, labour union, social fraternity or living/working in the same community.

A Savings and Credit Co-operative’s membership is open to all who belong to the group, regardless of race, religion, colour, creed and gender or job status. These members agree to save their money together in the SACCO and to make loans to each other at reasonable rates of interest. Interest is charged on loans to cover the interest cost on savings and the cost of administration. The members are the owners and the members decide how their money will be used for the benefit of each other.

Savings and Credit Co-operatives are democratic organisations and decisions are made in a structured democratic way. Members elect a board that in turn employs staff to carry out the day-to-day activities of the SACCO.

Want more information?

Telephone: 082 929-6226

Facsimile: 086 673-2006

Email: cc@closecorp.co.za