The financial landscape in Kenya is changing quickly. In that regard, how well young people interact with cooperative finance will determine the future of sustainable economic empowerment. Young people have enormous economic potential, as nearly 70% of Kenya’s population is under thirty five years. However, many still struggle with access to capital, financial literacy, and saving discipline. Saccos provide innovative and accessible financial solutions which can address those challenges.
Why Saccos need the next generation
In the past, working people, particularly those employed in the formal sector, were the major members of Saccos. However, today, young people are joining Saccos. The advantage of this trend is that young people are creative thinkers and this propels product development. Additionally, they are entrepreneurial and this boosts the demand for savings and loan products among Saccos. The digital savviness of the youth enhances the adoption of technology in the sacco sector. Due to their age, the youth can also make long term savings and investment in Saccos. By joining SACCOs, the youth not only secure their financial future , but also help ensure cooperative movement’s continued vitality and relevance.
Youth-focused financial products
By recognizing the changing demographics, many SACCOs are developing products for young people. They include business loans whose collateral requirements are flexible , interest rates are favourable and repayment periods are flexible. Secondly, the digital products are attractive to the youth due to their convenience. For those who want to save, most Saccos offer them friendly products through which they can start with small amounts of money and grow the same with time.
Skills development and financial literacy programs.
Some Saccos conduct workshops aimed at enhancing youth’s skills in digital marketing, investing, budgeting, and entrepreneurship.
Saccos as engines of job creation
Given Kenya’s high youth unemployment rate , Saccos provide several pathways for job creation. The first one is group based lending for youth startups.
Collectively, youth organizations can access funds, which facilitate the acquisition of seed money for: transport enterprises, innovation hubs, agribusiness and creative industry projects. By and large, Sacco loans assist the youth in starting or scaling up income generating ventures. Some Saccos have also created subsidiaries – for instance in real estate – that directly employ the youth.
Financial inclusion
Financial inclusion remains a big challenge, particularly for young people living in low-income households, rural areas, and informal settlements. SACCOs are particularly in a better position to close this gap because they inculcate a savings culture, which is important in the creation of long-term wealth. Additionally, they offer affordable credit, a welcoming community based model, which builds trust. By offering dividends on the share capital and interest on the ordinary savings, Saccos attract the youth through a sense of belonging and ownership.
The future belongs to the youth, and so does the cooperative movement. Young people who join Saccos benefit from community assistance and network, a base for building wealth through savings and dividends, access to capital at affordable rates to develop projects and businesses, protection against predatory lenders who trap a large number of young people in debt as well as opportunities for leadership within cooperative structures. Indeed, Saccos offer a real-world setting where young people can develop, learn and fortify their economic resilience.
