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Frequently Asked Questions About Saccos in Kenya
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Frequently Asked Questions About Saccos in Kenya

Over the years, Savings and Credit Cooperative Societies (Saccos) have evolved to become a pivotal pillar of Kenya's economic landscape. They have solidified their position as one of the most significant saving and investment vehicles and have been embraced by millions of Kenyans. 

According to the Sacco Supervision Annual Report of 2022, released in August 2023 by SASRA, the collective membership of regulated Saccos has reached an impressive 6.42 million members, underscoring their widespread appeal and impact. The report also said there were 359 regulated Saccos in the country. 

If you are not already a Sacco member and have considered joining one, you must have many questions and seek answers. You've come to the right place. This article will answer 20 of the most frequently asked questions about Saccos in Kenya.

Read Also: 5 Reasons to Join a Sacco in 2024

1. What is a SACCO?

A SACCO, which stands for Savings and Credit Cooperative Society, is a member-owned financial cooperative that operates on the principle of pooling resources to provide financial services to its members. These cooperatives are formed by individuals with a common bond, such as belonging to the same profession, living in the same locality, or working for the same employer.

The primary purpose of a SACCO is to promote thrift among its members and to provide them with affordable credit facilities and other financial services.

2. Are SACCOs Regulated in Kenya?

SACCOs are regulated by the government through the SACCO Societies Regulatory Authority (SASRA) in Kenya to ensure compliance with laws and regulations and safeguard members' interests. The institution was incorporated in 2010 under the legal framework of the SACCO Societies Act No. 14 of 2008.

3. Can Anyone Join a SACCO in Kenya?

Yes. However, SACCOs typically have eligibility criteria for membership, but they are generally open to individuals who meet them. The specific requirements may vary from one SACCO to another, depending on its bylaws and regulations. 

4. How Do You Join A Sacco?

Joining a SACCO typically involves a straightforward process outlined by the SACCO's rules and regulations. Once you have done your research and identified a suitable Sacco that aligns with your needs and goals and you meet the eligibility criteria for membership set by the Sacco, you will need to:  

  • Contact the SACCO or visit their office to obtain a membership application form and fill it out, and submit required documents such as identification documents, proof of address, proof of income, KRA PIN, and, in some cases, a CRB clearance certificate. 
  • Pay membership fees if applicable - If your application is approved, you'll receive confirmation of your membership from the SACCO. You may then be required to pay a one-off joining fee. 
  • Start making the minimum monthly deposit contribution, which will vary depending on the Sacco. 
  • Buy Sacco Shares - You may be required to invest in the Sacco by purchasing the minimum number of shares. Depending on the specific Sacco laws, this can be done immediately, or you can accumulate the required number of shares slowly within a given timeframe. 

5. What is the Minimum Share Capital Per Member?

Share capital is a product that lets the Sacco members have equity of ownership of a Sacco. Members can be required to own a minimum share capital, which varies depending on the Sacco. In one Sacco, the requirement can be 100 shares, while in another, the requirement can be 1,500 shares. Throughout their membership, members can buy more share capital. 

6. What Services Do SACCOs Offer?

SACCOs typically offer various financial services through two main branches: the BOSA (Back Office Service Activity) and the FOSA (Front Office Service Activity). 

BOSA services include non-withdrawable deposit/savings accounts to which members contribute each month, and funds can be accessed by taking a loan and exiting the Sacco. BOSA also provides various loan products to members, including personal loans, development loans, and emergency loans. These loans are typically funded by members' savings deposits and share capital.

BOSA may offer investment opportunities aimed at generating returns for members.

FOSA services offered by Saccos include transactional accounts, providing services such as deposits, withdrawals, chequebooks, account inquiries, internet banking, and mobile loans. FOSA may handle salary processing for members who choose to have their salaries deposited directly into their SACCO accounts.

The range of products and services will vary depending on the Sacco. 

7. How do You Earn Money in a SACCO?

In a SACCO, members can earn money based on their participation in the cooperative and the financial performance of the SACCO.  

SACCO members earn interest on their savings deposits. Saccos generates and shares interest earned from loan products with members.  

Members can also earn dividends on their share capital. If SACCO invests in profitable ventures such as shares, bonds, or real estate, members may receive dividends. The dividends earned from investments are typically shared among members based on their level of participation or shareholding in the SACCO.

8. How are Dividends and Interest On SACCO Deposits Calculated?

Interest on deposit is computed on a pro-rata (proportionally, per the rate) and compound basis at a rate to be recommended by the management committee and approved by the Annual General Meeting (AGM). 

So, if you want to calculate how much you will earn this year from the interest your deposits earned, you will need to find the agreed interest and divide that interest by 12 (number of months in a year). Your interest is calculated depending on the closing deposit every month. 

Dividends on share capital are computed based on the closing balance at the end of the financial year at a rate recommended by the management committee and approved by the Annual General Meeting.

The dividend rate is determined depending on the performance of the Sacco. Determine the average amount in your savings or share account during the specified period. Multiply your savings by the dividend rate to calculate your potential dividend earnings.

Read More: How to Calculate How Much You Will Earn in Sacco Dividends.

9. What is the Minimum Monthly Contribution, and Can I Contribute More Than the Minimum?

The minimum monthly contribution required by SACCOs varies depending on the specific SACCO's policies and membership agreements. Typically, SACCOs set a minimum savings requirement that members must contribute each month to maintain active membership and access SACCO services. 

While SACCOs usually specify a minimum monthly contribution, members are often allowed to contribute more than the minimum if they wish. 

Members can make monthly contributions acceptable through any mode of payment, i.e., Standing Orders, Payroll Deductions from employers, Cheques, Over-the-counter deposits & M-Pesa.

10. Can I Withdraw Some or All of My Sacco Deposits?

No, SACCO deposits are non-withdrawable, and members may not be able to withdraw some or all of their savings from their deposit account. However, they are refundable upon termination of membership, which involves filling out an exit withdrawal form and waiting 60 days for the refund to be processed. 

Share capital is non-withdrawable, and members may opt to retain shares after withdrawing their deposit or choose to sell/transfer to an existing member.

11. How Can I Access Loans from a SACCO?

To qualify for a loan from the Sacco, one should meet a list long of requirements, including being an active member with regular deposit contributions for a required number of months, having the minimum share capital requirement by the Sacco, having a steady source of income, provide security to for the loan applied for such as guarantors, logbooks, title deeds, etc., and you should proof you can afford the loan.

The requirements and eligibility criteria will vary depending on the Sacco. 

12. How Much Can I Borrow?

Each SACCO sets its lending policies, including minimum and maximum loan amounts. These policies are based on factors such as SACCO's financial health, loan portfolio management, and risk assessment practices.

SACCOs assess members' loan eligibility based on their ability to repay the loan. Factors such as income, employment stability, existing debt obligations, credit history, collateral, and guarantors are considered when determining the maximum loan amount a member can borrow.

13. Do I need a Guarantor to Borrow, and Who qualifies to be a Guarantor?

In many cases, yes, you may need a guarantor when borrowing more than your savings (deposit) in the SACCO. The SACCO may require a guarantor to mitigate the risk associated with the loan. Guarantors provide a guarantee to the SACCO that they will repay the loan if the borrower defaults and must be a member of the Sacco. With a guarantor, you may qualify for loans multiple times your savings. 

14. Do SACCOs accept Collateral as Security for Loans?

Yes, SACCOs may accept collateral as security for loans, especially if a member is unable to find a guarantor within the SACCO or when seeking larger loan amounts. Collateral serves as a form of guarantee for the loan and helps mitigate the SACCO's risk in case of default. Saccos accepts a variety of collateral, including logbooks and title deeds. 

15. How Long Does it take to Disburse Loans After Application?

The time it takes to disburse loans after application varies depending on several factors, including the type of loan, the amount required, and the SACCO's internal processes. 

SACCOs may expedite the approval and disbursement process for emergency loans and salary advances, in some cases, within 24 hours. Personal loans and business loans typically undergo a more thorough evaluation process, and as a result, approval and disbursement may take longer, ranging from a few days to a few weeks. 

16. Do Saccos Allow Early Loan Repayments?

Yes, SACCOs typically allow early loan repayments. 

However, borrowers need to review their credit agreement or consult with their loan officer before making early loan repayments to ensure no penalties or fees are associated with early repayment. Some SACCOs may charge prepayment penalties or fees to compensate for the interest income they would have earned if the loan had been repaid over the full term.

17. What Happens if I Default on My Sacco Loan?

If you fall behind on your loan repayment, you will be given notice and penalized, and your loan will be rolled over for 30 more days. If you default:

  • Your loan plus any penalties will be recovered from your available deposit; then, you will be required to reinstate the deposits utilized to clear the loan balance before your membership status is updated.
  • If you borrowed more than your deposit, your guarantors would be liable to pay the loan balance. And lastly;
  • You will be listed with the CRB. 

Read Also: What is Loan Default and What Happens After You Default?

18. Can I Terminate My Sacco Membership? What is The Process?

Yes. One can terminate their Sacco membership by withdrawing all their Sacco deposits and selling/transferring their share capital to another member of the same Sacco.

19. Can I Transfer my SACCO Membership to Another SACCO?

No. However, you can liquidate your investment in one Sacco by withdrawing all your savings, selling your shares, and using the proceeds to invest in another Sacco. 

20. What Happens to My SACCO Savings and Shares If I Die?

Sacco members are required to fill Next of Kin (Nominee) forms while still alive and nominate their beneficiary or beneficiaries. After your demise, your savings/deposits will be paid to the next of kin you nominated, and your share capital will be transferred to them. If you didn't fill out or update your Next of Kin (Nominee) forms, your beneficiaries will settle matters at the Public Trustees. 

Read Also: How To Know It Is Time to Change Your Sacco


With over 350 regulated Saccos in Kenya, individuals seeking to join one will be spoilt for choices. The abundance of options necessitates careful consideration before joining any Sacco. 

Each Sacco operates under its own set of by-laws, making it crucial for prospective members to conduct thorough research to ensure alignment with their financial objectives. This can be done by comparing them based on their product offerings, terms of service, interest rates, customer care, etc., and ensuring they match your needs and goals. 

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Farah Nurow is an experienced Content Writer who enjoys writing creative and educative articles meant to provoke readers' thoughts. He loves sunny weather and thick books. You can connect with him on LinkedIn.

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