To get in touch with me please email

A few months ago, I wrote about some wisdom my grandpa dispensed when I first started working. I’m ashamed to say I didn’t quite follow all the guidelines, and now 5 years later I will be seriously engaging with a SACCO.

Very few people under 30 are members of a SACCO especially in this age where the work place is getting less and less informal. The reasons could be the following:

  • They don’t understand what a SACCO is and how it works
  • We’re exposed to bank credit, which is easily accessible and therefore find no need to join a SACCO
  • SACCOs aren’t ‘cool’

The purpose of this post is to tackle the first concern, and hopefully convince you why you should use a SACCO as your savings avenue.


SACCO is an acronym for Savings And Credit Co-Operative, and I would define it as an association of like minded individuals, registered under the Ministry of Cooperatives (In Kenya), and authorized to take deposits from and lend to it’s members. SACCOs are governed by the SACCO bylaws which state the objectives, membership, share capital, organisation structure, management and lending regulations.

Most SACCOs are managed by a professional management team, which reports to a committee elected by members annually or according to the by laws of the SACCO.

Most SACCOs in Kenya have restricted membership, for example Mwalimu SACCO’s membership is restricted to teachers, but there are others like the IDB Capital SACCO which is open to any employed person.


Savings.SACCOs are deposit taking and are a great tool to channel your savings. The SACCO aggregates the savings and lends them out or invests in authorised instruments such as shares, treasury bills and bonds, and in some cases property as authorised by the by laws. Returns from these savings for a member can be as high as 10%, and this is a better channel than banks for the following reasons:

  • SACCOs require a minimum monthly contribution from members. This instills a saving discipline.
  • The money isn’t accessible to the member unless they choose to withdraw from the SACCO or take out a loan. This protects the savings and prevents impulsive spending of cash saved.
  • Savings in a SACCO do not attract bank charges at all.
  • Interest paid on these savings is often higher than bank rates.

Borrowing: Once one is a member of a SACCO, they’re allowed to borrow within the limits of their savings. The standard is a member can borrow up to 3 times their savings, provided other members give them guarantees or they give a form of security. SACCOs have various products, such as emergency loans which are processed within a day, school fees loans and development loans. The Mhasibu Sacco website details their products as an example. While bank may be able to extend you a larger unsecured loan, borrowing from a SACCO has several advantages:

  • SACCOs have lower interest rates and these rarely change. Most SACCOs in Kenya have been lending at 12% per annum, which is lower than the banks have offered even when market rates have been at the lowest. Banks also constantly revise their lending rates while SACCOs will rarely do this.
  • As a member of the SACCO, you earn interest on your savings which are part of what you have borrowed lowering your borrowing costs further.
  • While repaying a SACCO loan, a member is expected to still maintain the same level of monthly savings as they did before. This builds a saving discipline, and helps one accumulate a substantial savings base

Of course SACCOs have one main disadvantage which is they require guarantors or security, but one can begin by just borrowing within their saving level, as they seek to develop relationships within the SACCO.

Projects: SACCOs came up as a result of the Cooperative movement and because of that are very development oriented. Most SACCOs have other development projects that are very beneficial to the members. For example, Mhasibu SACCO had a Runda Plot project where by members saved over time, pooled the funds together and used these to buy a tract of land in Runda which was subdivided among the members of the project.

Participating in these projects can help one acquire investments faster and cheaper, than if they were to do it alone.

I’d recommend that one joins a SACCO even if it’s for a minimum contribution, and enjoy the benefits of the cooperative movement.

Are you a member of a SACCO? Have you ever considered joining one?

Other than IDB Capital SACCO, do you know any other SACCOs that are open to the public?

Please share  your views below.

  1. mt November 18, 2010 at 6:51 am Reply

    Interesting. Been thinking of joining Mhasibu. Do Saccos enjoy deposit protection from Deposit Insurance Scheme?

    • admin November 18, 2010 at 7:07 am Reply

      Mhasibu is very well managed @mt I’d encourage you to join.

      Great question, forced me to research a little bit. According to the SACCO Act of 2008, a Deposit Guarantee Fund is to be set up, governed by a Board of Trustees whose members include the PS and CBK Governor.

      This fund protects the members deposits (not shares) for up to Kshs 100,000 just like bank deposits.

  2. njukey November 18, 2010 at 6:53 am Reply

    Joining a SACCO was the best decision I made when I started formal employment. Thanks for shading some light on SACOO’s Rookie.

    • admin November 18, 2010 at 7:09 am Reply

      Karibu sana, thanks for reading 🙂

  3. Buggz79 November 18, 2010 at 7:17 am Reply

    Nice article madam. Appreciated.

    One area thats still grey to me is how the loan products work. Allow me to illustrate.

    If i have 100,000 shillings in a sacco, and I’m allowed to borrow 3 times my deposit, then i can borrow a max of 300,000. Should i use this facility, I will be paying interest on the full amount, yet a third of it is actually my own money. (Paying interest on 300,000 when effectively, its a 200,000k loan)

    Any thoughts on this?

    • kellie November 18, 2010 at 8:30 am Reply

      Thanks Buggz.

      Your SACCO deposit works pretty much the same way a cash guarantee on a bank loan would. You pay interest on the full amount, but then your deposit is earning interest in the process. That’s how your overall cost of borrowing reduces even lower than the concessionary 12% given.

  4. Pingback: Tweets that mention Isn’t A SACCO Just A Bank? --

  5. nzembi November 18, 2010 at 7:40 am Reply

    Great post and quite informative too. I’ve been wanting to join a SACCO for the longest time. With this information I’m ready to start scouting. Thanks.

    • kellie November 18, 2010 at 8:31 am Reply

      Great! All the best as you scout

  6. Potentash November 18, 2010 at 9:14 am Reply

    Joining a sacco was one of the best decisions i make. Its 4 the company i work 4 which makes it even better because u can get a salary advance as well as loans. It has helped me to pay for Uni n my professional exams as well as other things. Our dividends have been at 11-12 so my money has come back. Great article educating on benefits of sacco. Its never too late to start.

    • kellie November 18, 2010 at 11:00 am Reply

      Indeed, it’s never too late!

  7. UrbaneKenyan November 18, 2010 at 9:28 am Reply

    Very good post. I have been a member of one of the Sacco’s you have highlighted here for about five years now and I can say it’s one of the best decisions I ever made.

    For our Sacco, we have insurance for deposits and loans in event that something happens contrary to intended plans and purpose. That way, the insurance can compensate the Sacco to a given amount for loanees who die as such and for moneys in transit that could meet G4S and such…

    Through SACCO’s like ours there are other developments and plans that make life easier, for instance there is a school fees programme that runs for parents interested for children and for themselves; there is a housing programme and scheme that is run in partnership with KUSSCO for potential and interested home owners and many other programmes that include unconventional products like Entertainment systems for members (e.g. DSTV), Kentainer tanks for those doing developments on their properties and such… all these are at negotiated terms for the members…

    There is a lot that you could realize from being a member of a SACCO. I am glad you shared this post with the rest of the world. (Sorry for a composition in form of a comment)

  8. UrbaneKenyan November 18, 2010 at 9:34 am Reply

    Oh and I forgot to add… Ours even allows Investment clubs to join as a team and contribute as a group… Initially the idea was started with members forming sort of groups within, like merry go rounds to help each other achieve desired objectives within their groupings…

  9. kellie November 18, 2010 at 11:01 am Reply

    Thanks for a great comment! The investment club idea is a great one!

  10. UrbaneKenyan November 19, 2010 at 3:38 pm Reply

    Quite informative! UrbaneKenyan and Rookie please recommend SACCOs we can approach for further info

  11. edna November 7, 2011 at 10:01 am Reply

    Thanks Kellie for sharing this i am already a member of a sacco , so am glad to see someone highlight this to the young people because saving while youg is the best thing you could ever do.Though am interested in the one urbaneKenyan said that allows an investment group to join as a member kindly get me his contacts i will appreciate. cheers

  12. Imbuka Dennis November 28, 2011 at 6:57 pm Reply

    Thanks for this info. Men…I love this..I have been thinking hard of joining a SACCO but am lost which one to join. I have interest in Farming and juz got weary of a poorly managed SACCO. cAN i BE ADVISED on the best SACCO.

  13. Mwaffs December 28, 2011 at 5:58 am Reply

    Which are the best saccos that anybody from the public can join???? i want to join one this coming year…i.e. 2012

  14. Pingback: The 50,000 bob problem: Part 2, pricing our desires | The Rookie Manager

  15. Pingback: Popular Posts

  16. Thuo September 19, 2012 at 7:19 am Reply

    A nice read! I deem it worth anyone’s while/time.
    You wanted to know a few Saccos that are open to the public? I think Unaitas, Wananchi and Bingwa are.

  17. Not Mutant February 20, 2013 at 11:13 am Reply

    Thank you for the post.

    A Safaricom SACCO executive sold me the idea of joining a SACCO as part of an investment group but that didn’t seem to work. On account of being at that age where the things you form with friends are karaoke groups 😀

    A friend’s sister, though, gave me the same advice as you posted and though I haven’t got round to it (I shoud take that advice about habits!), I have researched on a few and this post served as a great source of information…and motivation.

    Hopefully it will take shorter than 5 years after my first job to get round to it!

    All the best. And no more compositions (I hope).

    • veevee May 6, 2014 at 4:16 pm Reply

      Did you get around to doing anything about it?

  18. Not Mutant February 20, 2013 at 11:19 am Reply

    Also, many thanks to you and Thuo. The only SACCO open to the public I knew was Unaitas; glad to know there are more options.

  19. Thuo February 21, 2013 at 7:03 am Reply

    Who should be thanking who? This article gave me a strong dose of sense that saw me join a sacco.

  20. MrsMwiti April 1, 2014 at 9:25 am Reply

    Everyone in my organization can join the employee’s Sacco if they want.

    When I joined 7 years ago , as I was going around on my induction program (the first few weeks), I was surprised by the number of people who said “Make sure you join the Sacco!”

    It is one of the best decisions I have ever made and I have reaped many benefits from it. Also , it is very professionally run. You apply for a loan today and so long as you have met the requirements , tomorrow you have your cheque. They make it so easy.

    The icing on the cake is that recently they amended the rules and you can still continue to be a member even after you leave.

    I have always wished though that my house help can join some Sacco. I know they have their househelp chama sometimes but they are not very sustainable. What with challenges like when the treasurer gets sacked or decides to go underground. Oh , the drama! 🙂

    On SACCOs open to public , recently a friend has pointed out . You pay 30K to join. Then you can pay as little as 3K per month from then on wards. They don’t give loans. Members are assisted to buy property instead. So SIC identifies the property and gives members a 50K discount. No matter the cost of the land/or property. Didn’t find it very attractive (the 50K flat discount). Maybe I can get a better deal myself? What are your thoughts from a Financial Perspective?

    Well , my house help could also join SIC but I think she would be more interested in a Sacco that can give loans.

  21. MrsMwiti April 1, 2014 at 10:41 am Reply

    Oh, also for your monthly contribution with SIC , you get SIC shares.

  22. @abuga_ September 3, 2014 at 1:03 pm Reply

    Thanks for this post. Still relevant two years after you posted it. – Edwin

  23. fadho September 23, 2014 at 3:49 pm Reply

    Thanks to th admin of this post, i love Saccos so much and would always encourage people to join,its a place to be. Iam pursuing a degree in Cooperative mgt and will always encourage people as far as Saccos are concerned.

    • Alex Munzyu December 18, 2014 at 2:07 pm Reply

      hi fadho? i am taking a diploma on the same and thanks for finding a person like you whom we can share ideas . where do you undertake your degree program that is which campus

Leave a Reply

About the Author

When I’m not here writing, I run Lattice Training, where we offer customized training solutions for businesses of all sizes, from startup entrepreneurs all the way to large corporations.
The aim of this blog is to simplify personal finance. I write about budgeting, personal finance, management and doing business in Kenya, in a way that everyone will understand.

If you have questions or would like to get in touch with me, leave your details on the form below, and I will get in touch. Thanks for reading.

Related Posts

It must have been in 1996. Just about to turn 30, I was the Chief Accountant for a parastatal that...

Which is the best SACCO to join if you want to save for a home? This question came from one of my...

It is that time of the year when we make plans (I prefer to call them plans, not resolutions) for...