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Saccos in Kenya: To Join or Not?
Saccos in Kenya: To Join or Not?
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Saccos in Kenya: To Join or Not?

Money254 Team
August 17, 2021

Savings and Credit Cooperatives (Saccos) in Kenya have been steadily gaining popularity over the last two decades, with most using them as investment avenues.

Simply put, a Sacco comes to being when a group of people with similar interests come together to form a credit union. 

A group is required to register the union with the Department of Registration of Co-operatives under the Industrialisation ministry. 

For a non-deposit taking Sacco, a minimum of 10 members is required to register among other requirements after which the Co-operative Officer convenes a meeting with the proposed members. The registration process takes about two months. 

If the Sacco intends on taking deposits, it will be required to obtain a license from the Sacco Societies Regulatory Authority (SASRA) which is mandated to license and regulate the operation of Deposit Taking Saccos (DTS).

Over the years, small Saccos have also stemmed under this model, with members using the pool of funds to invest both for the short and long term.

From big Saccos such as Mwalimu, Police, Stima to smaller Boda Boda Saccos, investment in real estate has been possible for many low-income earners, setting up commercial plazas across the country as revenue generating ventures.

The Covid Effect

Worryingly, data from SASRA shows a massive drop in terms of member savings since the onset of the Covid-19 pandemic.

In 2020, 1.3 million savers stopped making deposits, a 79.5% jump from the 764,472 who had stopped making deposits in 2019.

This is believed to have been tied to the massive job losses experienced across the country as a result of the Covid-19 pandemic.

SASRA’s Annual Report 2020 further highlighted the ever-growing amounts of non-remitted deductions which some employers continue to owe to Deposit-Taking Saccos.

“The total amount of non-remitted funds as at September 2020, stood at a staggering Ksh5.04 Billion compared to Ksh3.87 Billion as at September 2019.

“To worsen the scenario, the highest proportion of the non-remitted funds owed to the Deposit Taking Saccos amounting to Ksh4.31 Billion, related to repayment of loans,” reads an excerpt from the report.

In terms of the individual performance, Mwalimu National Sacco Society Ltd remains the largest deposit-taking Sacco in the country by total assets which was posted at Ksh57.73 Billion in 2020 compared to Ksh 52.73 Billion posted in 2019.

Why Choose Saccos?

They encourage disciplined saving

Members are required to save consistently and this, in turn cultivates the discipline of saving frequently. 

Committing a portion of your money to a Sacco instills a saving culture and also acts as a security for unforeseen emergencies in the future.

Once you’ve started saving, you cannot access the savings. You can only take a loan or discontinue your membership, in which case you’ll take your savings with you. 

Some Saccos also have a minimum monthly savings amount that is aimed at helping members keep up with their savings goals. 


Saccos have earned a good reputation of nearly always guaranteeing returns to members via paying dividends against the savings of its members.

Despite the economic challenges witnessed last year many Saccos declared high annual returns to members.

At least 3 Saccos namely: Hazina, Tower and Mombasa Port are on record as having paid a 20% dividend per share at the end of 2020.

The Kenya Police National Sacco, Stima Sacco, Biashara and Unison Saccos offered dividends of 17%, 14%, 18% and 15% per share respectively. 

They provide an emergency line of credit

On those rainy days, Saccos can provide much needed emergency credit to members in a timely manner. 

As an example, some Saccos have specific school fee emergency loan provisions that can be processed and availed to the member in need within 24 hours.

With repayment interests ranging between 1% and 1.5% per month in reducing balance, loan periods can be extended up to 72 months in some Saccos in Kenya.

Some of the factors to consider before joining a SACCO are covered in detail here.

A substantial proportion of Sacco lending is usually based on the collateral of non-withdrawable savings of the members. 

This is how most Sacco end up offering loans up to three times the amount saved by a member. For example, if your yearly savings totalled to Ksh250,000, you’d be a eligible  for a Ksh750,000 loan. Note that a guarantor(s) is required to process the loan.

If you are earning an income, and are thinking about where best you can save and grow that money, a Sacco is one of the options you can consider. .

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