Can you buy SACCO shares? Understanding how SACCO share ownership works

SACCOs, or Savings and Credit Cooperative Organizations, have become a cornerstone of financial inclusion in Kenya. They provide affordable loans, encourage savings, and empower members to invest collectively in productive ventures. One of the most important aspects of being part of a SACCO is share ownership. But can you actually buy SACCO shares — and if so, how does it work?

This article explores what SACCO shares are, how to buy them, and why they are essential to both the SACCO’s operations and the member’s financial growth.

Table of Contents

What are SACCO Shares?

SACCO shares represent a member’s ownership stake in the cooperative. When you join a SACCO, you become a shareholder, meaning you partially own the organization alongside other members. Each member is required to purchase a minimum number of shares as set out in the SACCO’s by-laws.

Unlike ordinary savings, shares are part of the SACCO’s permanent capital — they cannot be withdrawn like deposits. Instead, they remain in the SACCO for as long as you are a member and can only be transferred or sold under specific conditions, such as when you leave the SACCO.

Shares also determine your voting rights and dividends. The more shares you own, the higher your potential dividend payout and influence in decision-making during the Annual General Meeting (AGM).

Can You Buy SACCO Shares?

Yes, you can buy SACCO shares — but only if you are a registered member of the SACCO. Membership is typically open to individuals who meet specific criteria, such as being part of a certain profession, company, or community group.

Once you become a member, the SACCO will inform you of the minimum share capital required and the price per share. Some SACCOs allow members to gradually build up their shares through monthly contributions, while others require full payment upfront.

If you wish to increase your ownership, you can buy additional shares beyond the minimum required. However, SACCOs usually have an upper limit to ensure fair ownership distribution among members.

How to Buy SACCO Shares

Buying SACCO shares is a straightforward process, but it varies slightly depending on the SACCO’s policies. The general steps include:

Join the SACCO: Complete the membership registration process and pay the joining fee.
Meet the Minimum Share Requirement: Purchase the minimum number of shares required to qualify as a full member.
Make Additional Share Purchases: If allowed, you can buy more shares to increase your ownership and future dividend potential.
Receive a Share Certificate: Once payment is confirmed, the SACCO issues a share certificate as proof of ownership.

Payment can be made through cash deposits, mobile money, or direct bank transfers. Most SACCOs have adopted digital platforms that make it easier for members to track and purchase shares online.

Benefits of Buying SACCO Shares

Owning SACCO shares comes with multiple benefits. First, it gives you a voice in the cooperative’s management. Shareholders are entitled to vote and participate in key decisions, including leadership elections and policy changes.

Secondly, shares earn dividends, which are distributed annually based on the SACCO’s financial performance. The more shares you own, the higher your potential returns.

Additionally, having shares can increase your borrowing power. SACCOs often consider shares when calculating loan eligibility, meaning members with more shares can access higher loan limits.

Finally, buying SACCO shares promotes financial discipline and a sense of ownership. It encourages members to think long-term, aligning their personal financial growth with the SACCO’s success.

Can You Sell or Transfer SACCO Shares?

Yes, but under strict conditions. SACCO shares are not traded on the open market like company stocks. If you decide to leave the SACCO, you can sell your shares to another member or to the SACCO itself, depending on its policy.

Most SACCOs require that the buyer be an existing member to maintain the cooperative structure. The transfer must also be approved by the management committee to ensure compliance with internal rules.

It is important to note that the value of SACCO shares remains constant — they are not subject to market fluctuations. However, the dividends earned from those shares can vary each year based on the SACCO’s profitability.

Risks and Considerations

While SACCO shares are a reliable investment, they are not without risk. Since shares cannot be withdrawn, they offer limited liquidity. This means your funds are tied up in the SACCO unless you exit or transfer ownership.

Additionally, poor management or low profitability can reduce dividend payments. Members should therefore conduct due diligence before buying shares, ensuring the SACCO has a strong financial track record and transparent leadership.