Youth empowerment through SACCOs is a critical aspect of national development. Kenya takes pride in its rich natural resources and human capital. However, despite the abundance of resources, the country is still grappling with high levels of youth unemployment and underemployment. Therefore, this has led to a growing interest in finding sustainable solutions that can help address the issue of youth unemployment. To curb this critical initiation, the country’s Vision 2030 development plan has identified youth empowerment as a key component.
In regards to development plans established, one of the potential realistic solutions that have been established is youth empowerment through SACCOs.
What are SACCOs?
SACCOs are member-owned financial cooperatives that are owned and run by members. SACCOs provide financial services to their members. Members can save money and access credit facilities at affordable rates.
They are a viable option for youth empowerment since they provide access to finance, employment, and enterprise development.
In the case where members join SACCOs, they are able to save in order to achieve a common primary goal. In the process of pooling funds, Saccos’ initiative to active financial inclusion helps to improve the financial well-being of its members.
Youth Participation in SACCOs in Kenya
Over time, SACCOs have been recognized as an important vehicle for mobilizing savings and providing credit to members. They have been in existence for over 50 years and have played a significant role in the country’s economic growth. Currently, there are over 4,000 SACCOs in Kenya, with a membership of over 14 million people.
Despite the significant contribution of SACCOs to Kenya’s economy, youth participation in SACCOs is still low. Older members dominate SACCOs, leading to the underrepresentation of young people in most instances.
However, various factors such as the changing economic landscape and the recognition of the potential of youth in driving economic growth have contributed to a growing trend of young people joining SACCOs in Kenya.
The government has been working to resolve the issues and has come up with various initiatives such as the Youth Enterprise Development Fund, which provides young people with financial resources to start businesses and become self-employed. The fund has been instrumental in increasing youth participation in SACCOs, providing young people with the financial resources they need to become members of these organizations.
Role of SACCOs in Youth Empowerment
Youth empowerment through SACCOs refers to the process of providing young people with the resources, knowledge, and skills they need to become self-reliant, productive members of society through SACCOs. The concept of youth empowerment through SACCOs is based on the idea that young people can be empowered by providing them with access to financial resources and training. This empowerment can help young people to start their own businesses, create employment opportunities for themselves and others, and contribute to the economic development of their communities.
Challenges Facing Youth Participation in SACCOs
Despite the critical role that SACCOs play in promoting youth empowerment, there are still several challenges facing youth participation in SACCOs. The challenges include:
- Lack of awareness among youth
In most instances, the youth are not well aware of the benefits of SACCOs. Therefore, it is possible for many youths to be locked out of opportunities and the great provision by SACCOs to ensure financial inclusion and youth empowerment.
- Lack of financial resources
SACCOs lock out many young people due to a lack of funds that could facilitate their participation in joining SACCOs.
This is due to the high poverty levels and unemployment in the country. The youth fail to afford the membership fees required to join SACCOs due to this situation. Also, by not having a stable source of income. It coils also be a challenge to task the youth to make regular savings or contributions.
- Lack of trust in SACCOs.
Some youth are skeptical about the credibility of SACCOs and are hesitant to join them. Reports of mismanagement and corruption in some SACCOs often fuel this mistrust.
This is because cases of fraud and embezzlement of funds have been commonly witnessed.
- Lack of financial literacy among the youth.
This is a major contribution to the youths not joining SACCOs. This is because they are not aware of the advantages that could result in them joining SACCOs and generally their financial management.
Solutions to the Challenges Facing Youth Participation in SACCOs
To promote youth participation in SACCOs, we need to implement several solutions such as
- Increase awareness among youth regarding the benefits of SACCOs.
Targeted marketing campaigns can help to achieve this. Marketing serves to emphasize the role of SACCOs in promoting financial inclusion and youth empowerment.
Marketing can also be achieved if SACCOs embrace various digital platforms and also digitize their processes.
- Provision of financial support to young people to join SACCOs.
This can be achieved through the establishment of youth-specific SACCOs that cater to the needs of young people. These SACCOs can offer lower membership fees and interest rates to encourage more young people to join.
- Enhance transparency and accountability in SACCOs.
This can be achieved through increased oversight implemented on SACCOs. The government could also come in to help the SACCOs achieve transparency by also ensuring that they are regulated. By being regulated, it means that the SACCOs will only operate in accordance with the law thus ensuring that members are confident as they take up the opportunity to join SACCOs.
In conclusion, SACCOs have the potential to empower the youth in Kenya. SACCOs provide young people with an avenue for saving money, accessing credit, and networking. SACCOs also provide training and mentorship programs that can be beneficial to the youth. However, there are challenges that need to be addressed, such as lack of awareness, lack of trust, and lack of financial literacy. SACCOs can address these challenges through targeted marketing campaigns, technology investments, and financial education programs. The government can also come in to salvage the situation. With the right strategies in place, the role of SACCOs in promoting financial inclusion will be achieved. There will also be an assurance of youth empowerment by SACCOs thus ensuring economic growth in the country.