In a country where access to affordable credit and safe savings options can be limited, Savings and Credit Cooperative Organizations (SACCOs) have emerged as a popular and practical solution for many Kenyans. Whether you’re a salaried employee, a business owner, or part of a community group, joining a SACCO can be a stepping stone toward financial security and empowerment.
But with over 175 licensed deposit-taking SACCOs and hundreds of non-deposit taking SACCOs operating in Kenya, how do you choose the right one?
This article breaks down how SACCOs operate, the key considerations when selecting one, and the difference between deposit-taking and non-deposit-taking SACCOs to help you make an informed decision.
Understanding How SACCOs Operate in Kenya
SACCOs are member-owned financial cooperatives. Members pool their savings together and use those funds to provide loans and other financial services to each other at affordable rates. SACCOs are regulated under the Sacco Societies Act (2008) and supervised by the Sacco Societies Regulatory Authority (SASRA).
Key Features of SACCOs:
- Member Ownership: Each member has a say in how the SACCO is run, typically through an Annual General Meeting (AGM).
- Savings and Shares: Members save regularly and buy shares, which determine their borrowing power and dividend earnings.
- Loans: Members can access credit at lower interest rates than banks, based on their savings and creditworthiness.
- Dividends: Profits made by the SACCO are distributed among members based on their shares.
Types of SACCOs in Kenya
There are two main categories:
- Deposit-Taking SACCOs (DT-SACCOs)
Also known as FOSAs (Front Office Service Activities), these SACCOs operate like mini banks. Some of their key features include:
- Can accept deposits beyond share capital, including current accounts, savings accounts, and fixed deposits.
- Offer ATM cards, mobile banking, and sometimes cheque books.
- Licensed and supervised by SASRA.
- Non-Deposit-Taking SACCOs (BOSAs)
Also Read: Choosing the Right Bank in Kenya: What to Consider Before You Open an Account
Operate a Back Office Service Activity model:
- Primarily focused on savings and lending.
- No front office banking services such as cash withdrawals, ATMs, or mobile banking.
- Regulated under the Ministry of Cooperatives but not licensed by SASRA unless they meet a certain asset threshold.
What to Look for When Choosing a SACCO
Selecting the right SACCO requires more than just proximity or word-of-mouth. You must consider the following factors:
- Registration and Licensing
- Check whether the SACCO is registered with the Ministry of Cooperatives and Micro-Small and Medium Enterprises (MSMEs) Development. If it’s a DT-SACCO, confirm that it is licensed by SASRA.
- Visit the SASRA website to view the latest list of compliant SACCOs.
- Financial Stability and Track Record
- Ask for or review the SACCO’s audited financial statements, annual reports, or performance ratings. Most SACCOs may not be willing to share this, but ask anyway.
- Choose a SACCO with a strong asset base, low default rate, and consistent dividend payout history.
- Governance and Transparency
- Find out how often the SACCO holds AGMs and how members are engaged in decision-making.
- Transparent SACCOs will openly share policies, fees, loan terms, and member rights.
- Products and Services
- Evaluate whether their loan products match your needs — e.g., development loans, emergency loans, school fees loans, etc.
- Consider the flexibility in repayment terms, interest rates, and associated charges.
- Technology and Accessibility
- Is the SACCO digitized? Do they have mobile banking, USSD services, or a web portal?
- How accessible are their branches or agents?
- Membership Eligibility
- Some SACCOs are based on common bonds (e.g., teachers, civil servants, farmers), while others are open to the general public.
- Confirm the membership requirements — minimum share contribution, joining fee, or monthly savings.
- Customer Service and Reputation
- Seek reviews or referrals from existing members.
- A SACCO with good customer service will respond to queries, provide timely updates, and treat members respectfully.
Deciding Between a Deposit-Taking and Non-Deposit-Taking SACCO
Your choice between a DT-SACCO and a BOSA SACCO will depend on your needs and preferences.
| Criteria | Deposit-Taking SACCO (DT-SACCO) | Non-Deposit-Taking SACCO (BOSA) |
| Regulation | Licensed and regulated by SASRA | Registered under Ministry of Cooperatives |
| Services | Offers banking services like savings accounts, ATM cards, mobile banking | Focuses on savings and loan services only |
| Accessibility | Easier access to funds, more convenience | May require physical visits for withdrawals |
| Complexity | Slightly more complex, better suited for advanced financial needs | Simpler and more traditional |
| Ideal For | Members seeking full financial services under one roof | Members interested mainly in savings and borrowing |
What You Need to Join a SACCO
To become a member, you typically need:
- A copy of your national ID or passport
- Passport-sized photos
- KRA PIN
- Completed membership application form
- Membership fee (varies per SACCO)
- Initial share capital contribution and monthly savings commitment
Selecting a SACCO
Selecting a high-performing Savings and Credit Cooperative Organization (SACCO) in Kenya is crucial for maximizing returns on your savings and investments. Performance is often evaluated based on dividends on share capital and interest rates on member deposits.
Also Read: SACCOs Regulator Mulls New Rules to Save Societies from Growing Loan Defaults
Here are some of the top-performing SACCOs in Kenya as of 2024
Tower SACCO – Tower SACCO has consistently offered attractive returns to its members. In 2024, it declared a dividend of 20% on share capital and 13% interest on member deposits, reflecting its robust financial health and effective management.
Mwalimu National SACCO – As the largest teacher-based SACCO in Africa, Mwalimu National SACCO serves educators and employees of the Teachers Service Commission (TSC). As of 2024, it boasts assets totaling Kshs 66.43 billion, indicating its substantial growth and stability.
Stima SACCO – Originally established for employees in the energy sector, Stima SACCO has expanded its membership to include individuals from various sectors and the diaspora. It is renowned for its high dividends and diverse loan products, catering to a broad member base.
Kenya Police SACCO – Serving members of the National Police Service and affiliated organizations, Kenya Police SACCO has demonstrated consistent growth and offers competitive financial products, making it a reliable choice for its members.
Harambee SACCO – Harambee SACCO caters to government employees and has a long-standing reputation for providing substantial dividends and interest rates, reflecting its commitment to member prosperity.
Safaricom SACCO – Established for employees of Safaricom and related entities, this SACCO offers competitive returns, and a range of financial services tailored to its members’ needs.
Kimisitu SACCO – Kimisitu SACCO serves employees of international organizations, NGOs, and embassies. It is known for its strong financial performance and member-focused services.
Unaitas SACCO – Unaitas SACCO has evolved from a small tea farmers’ cooperative to a nationwide SACCO offering diverse financial products and competitive returns to its members.
Mhasibu SACCO – Targeting professionals in the accounting and finance sectors, Mhasibu SACCO provides tailored financial solutions and has a history of attractive dividends and interest rates.
Biashara SACCO – Biashara SACCO is recognized for its substantial dividend payouts and interest rates, making it a favorable choice for members seeking significant returns on their investments.
Final Thoughts
Choosing the right SACCO is a vital step toward achieving financial independence. Take time to research, compare options, and ask questions. Whether you’re saving toward a goal, seeking affordable credit, or planning to invest, the right SACCO can be a trusted financial partner on your journey.
Consider factors such as membership eligibility, financial stability, governance, product offerings, and accessibility. While high dividends and interest rates are attractive, a comprehensive evaluation will ensure the SACCO aligns with your financial goals and needs.
Pro tip: Don’t be swayed by high dividend promises alone. A good SACCO balances growth, stability, and ethical governance.
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