Features & Sacco Leadership

How much is share capital in a SACCO?

Benefits of SACCO shares: How much is share capital in a SACCO?

In Kenya, the amount required for share capital in a SACCO (Savings and Credit Cooperative Organization) varies significantly depending on the SACCO’s individual policies and regulations. Typically, the minimum share capital can range from Kshs. 5,000 to Kshs. 30,000 or even higher. This variation reflects the diverse nature of SACCOs and their specific financial requirements.

Share Capital

When you invest in a SACCO, your share capital contributes to the cooperative’s overall funds. The amount you invest in shares determines your ownership stake and can influence the benefits you receive from the SACCO.

Benefits of Investing in SACCO Shares

  1. One of the primary advantages of owning SACCO shares is the potential for dividends. When the SACCO performs well financially, a portion of its profits is distributed among its members based on their shareholding. The more shares you own, the larger your share of the profits, providing a passive income stream from your investment.
  2. Shareholders in a SACCO have voting rights, giving them a voice in the cooperative’s decision-making processes. This includes voting on important issues such as electing board members, approving major investments, and setting loan interest rates.
  3. Owning SACCO shares often entitles you to better loan terms. Shareholders may benefit from lower interest rates, more flexible repayment schedules, and higher loan limits compared to non-shareholders.
  4. Over time, as the SACCO grows and expands, the value of your shares can increase. This potential appreciation means your initial investment could yield a profitable return as the cooperative develops.
  5. Being a shareholder involves actively engaging with the SACCO’s financial health and performance. Shareholders receive regular reports, attend member meetings, and gain valuable insights into financial management, fostering a deeper understanding of personal finance.

Share Transfer and Refund Policies

In most SACCOs, shares are non-refundable, meaning you cannot simply withdraw your investment as cash. However, you have the option to transfer your shares to other existing members of the SACCO.

For example, if you hold shares worth Kshs. 250,000 and wish to sell them, you can negotiate with other members who are interested in buying your shares. The process for transferring shares typically involves formal communication with the SACCO to ensure a smooth transfer and proper record-keeping.

 

Andrew Walyaula
Author: Andrew Walyaula

Andrew Walyaula is a seasoned multimedia journalist. waliaulaandrew0@gmail.com

Andrew Walyaula

About Author

Andrew Walyaula is a seasoned multimedia journalist. waliaulaandrew0@gmail.com

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