A Savings And Credit Co-Operative (SACCO) is an association of like minded individuals, registered under the Ministry of Ministry of Cooperative Development & Marketing in Kenya, and authorized to take deposits from and lend to it’s members. SACCOs are governed by the SACCO by-laws which state the objectives, membership, share capital, organization structure, management and lending regulations. The sector is regulated by the SACCO Societies Regulatory Authority (SASRA).

BENEFITS

1. Loans

Members of a SACCO, their families and friends can access loans from the SACCO guaranteed by their savings or those of other members in the SACCO. SACCOs give loans to borrowers of amounts up to 3 times their savings. SACCO loans are usually short term loans and priced lower than bank loans. Currently, legislation has capped SACCO lending at 12% per annum. The average lending for bank loans is currently at 20% per annum.

2. Build Credit Information

A person's saving and borrowing information is recorded by the SACCO at all times. If repayment of all loans is done promptly, the individual's borrowing record adds to his/her credit reference information which becomes useful in later days when they want to get bigger loans from other institutions.

3. Asset Acquisition Arrangements

Many SACCOs have arrangements with their members where the institution guarantees a member's acquisition of assets. In these arrangements, members can get household items, plots, cars and stock for business with easier repayment arrangements.

Some SACCOs in the country help their members construct or buy homes at lower rates than the average mortgage rates offered by commercial banks.

4. Invest

SACCOs are an ideal way to channel your savings. The SACCO aggregates the savings and lends them out or invests in authorized instruments such as shares, treasury bills and bonds, and in some cases property as authorized by the by laws. Returns from SACCO savings for a member are usually high and sometimes better than what banks offer.