Sacco vs. Bank loans in Kenya, which one is better?

Question

I need pros and cons of which is better between Sacco and Bank loans

Answer 1

Here is a comparison between Sacco and Bank loans in Kenya to help you make a decision on which one you should choose.

Sacco vs Banks Loans in Kenya

Repayment Period

• Sacco:  They have a short repayment period
• Bank:  They Have a long Repayment period

Security

• Sacco: You need guarantors or be a member with shares to get a loan
• Bank: No guarantors are required. Only your Payslip

Amount Given

• Sacco: They give low amounts unless you have high savings.
• Bank: High amount given to salaried people and businesses with regular deposits.

Interest Rate

• Sacco: Have Low-Interest Rates
• Bank: Have high-interest rates.

Banks are therefore ideal for established businesses and salaried people and loans are ideal for both employed and unemployed people with a saving culture or shares.