@mozenrat,

Since SACCOs are reaping more from interest payments than the banks(as you have proved )why don't the banks all convert to SACCOS after which they will be laughing more.........

@Njung'e..

this is precisely why I had insisted that we limit the scope of this discourse to Interest charged...

Otherwise,once you introduce these other figures,then I can as well argue that while your 100k was stuck in the sacco in the year before taking out the loan... I was using mine to trade and made more than just 8%...

In addition,if the Sacco guy has 4,500 a month to save (54,000 a year) so does the bank guy... Which he could also be trading at or at more than 8% a year..

In the third year,the Sacco guy is saving 4,500 a month to obtain returns of only 8% while he bank guy now has 14,500 a month to trade...

Bank loan qualification is 3 months while for most Saccos I know,its 6 months. In the 3 month differential,how much do you think the bank guy could have made with the 300k.

I'm telling you,in real life where people use money to make more money,the difference between taking out a Sacco loan and a Bank loan is negligible...

@shak,

You're neither wrong nor right....

It depends on the specific contract...

Most unsecured bank loans are charged interest on reducing balance...

But I've heard that Equity Bank offers Asset Finance on straight line basis

@ Mwenza,I was just thinking,have you ever heard of a person who was rendered bankrupt after taking a SACCO loan? There are enough cases of bankruptcy by those who have taken bank loans. Go through the posts and study the numerous benefits that accrue to a SACCO member. Your interest calculations do work in theory but when it comes to the real deal,given a choice,99% of Kenyans will take a SACCO loan any day. Ask yourself why. Do a more broadbased study that does not just cover interest charges.

@ mwenza,i acknowledge your post and have taken this excerpt from a previous posting you made:

'@ Mozenrat.......Am happy at least one person can see my argument. My argument was really not about the pros and cons of saccos......for the record av been a member of a reputable one since 1992.... but rather in every situation,there is always room for improvement. Granted,SACCOS are not in any way comparable to banks when it comes to borrowing from them but that does not mean they cant be enhanced to be more attractive to members......'

Mozenrat,you are quite a smart chap with some nice arguments,but you overlook a lot of facts with your discourse.
1. Loan eligibility in saccos is membership through payment (even 100 bob) for six months. Assume therefore novestor saves KES 600/- over six months at sacco and puts the KES 99,400/- somewhere (or under mattres),or trades with it as you say,OK.
2. Novestor Takes the 99,400/- from under mattress,takes to sacco,and applies for three times the amount (300K).
Where does this leave your analysis?

Learn something new everyday