The role of informal microfinance institutions in saving

fact that their SACCOs serves all kinds of people, holds frequent member meetings to discuss
SACCOs improvement, and educates members on the importance of saving; only 2.2% of
respondents agreed.
4.1.13: What Members like Least about SACCOs?
When asked ‘’what is the most important problem that your SACCOs should try to change?’’,
45% of respondents suggested a change in lending services. 28% thought that collateral
requirements should be relaxed, and that the maximum amount that members are eligible to
borrow should be increased. Specific suggestions included:
1) Increase the loan/savings ratio;
2) Base loan size on ability to pay rather than savings, especially when the loan is paid
by payroll deduction;
3) Give bigger longer terms loans. Some members stated that they thought loan size
should be based not only on the quantity of shares, but also on deposits; apparently
some members do not understand that this is already the case. 13% respondents think
that the SACCOs should concentrate on reducing the time required for loan approval
and disbursement of loan funds, and 12% suggest lowering the interest rate on loans.
4.1.14: New Services
When asked “What is the most important new service that you think your SACCOs should
offer in the future?’’, 35% of the respondents suggested that SACCOs offer bigger longer term
loans including house loans and home improvement loans. Another 10% would like SACCOs
to offer loans on household items, tools, machines, business or farm equipment, bicycles, and
vehicles using the item as collateral rather than savings. 7% of respondents think that SACCOs
should offer a more complete line of business services. 14% of respondents think that SACCOs
should offer business start-up loans, large long term business loans, a special business savings
accounts.6% of respondents would like SACCOs to offer loans on special terms for farming,
livestock rearing, and poultry raising.
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