How SACCO governance is structured

Savings and Credit Cooperative Organizations (SACCOs) play a pivotal role in financial inclusion, particularly in empowering individuals to access credit and build wealth. The success of a SACCO largely hinges on its governance structure, which ensures transparency, accountability, and member participation.
The General Assembly
At the heart of SACCO governance lies the General Assembly, which comprises all members of the SACCO. This body serves as the supreme decision-making authority and convenes at least once a year during the Annual General Meeting (AGM). During these meetings, members approve financial statements, elect board members, and vote on key issues such as dividend distribution, policy amendments, and strategic direction. The General Assembly embodies the democratic nature of SACCOs, ensuring every member has a voice.
The Board of Directors
The Board of Directors (BOD) is the cornerstone of SACCO governance, tasked with overseeing the organization’s strategic direction and ensuring its smooth operation. Members of the board are elected by the General Assembly, typically based on their expertise, experience, and commitment to the SACCO’s mission.
The board’s responsibilities include approving budgets, setting policies, and monitoring the performance of the management team. Additionally, the board ensures compliance with regulatory frameworks and ethical standards, safeguarding the interests of all members.
Supervisory Committee
Complementing the Board of Directors is the Supervisory Committee, often regarded as the watchdog of the SACCO. This committee operates independently from the board and management, focusing on internal audits and ensuring financial integrity.
The Supervisory Committee reviews financial records, investigates complaints, and assesses whether the SACCO’s operations align with its policies and objectives. By doing so, it provides an additional layer of accountability, fostering trust among members.
Management Team
The management team, led by the Chief Executive Officer (CEO) or General Manager, is responsible for the daily operations of the SACCO. This team implements the policies and strategies set by the board and ensures efficient service delivery to members.
Key functions of the management team include loan disbursement, member recruitment, and maintaining financial records. The team also plays a crucial role in innovation and service improvement, ensuring the SACCO remains competitive in a dynamic financial landscape.
Committees
In addition to the main governance bodies, SACCOs often establish specialized committees to address specific areas such as credit, education, and investment. For example, the Credit Committee evaluates loan applications, while the Education Committee focuses on member training and awareness programs.
These committees operate under the guidance of the board, providing detailed oversight and expertise in their respective domains. This specialized approach ensures that all aspects of the SACCO’s operations are well-managed and aligned with its goals.
Regulatory Framework
SACCO governance is also influenced by external regulatory frameworks, which vary by jurisdiction. Regulatory bodies, such as the SACCO Societies Regulatory Authority (SASRA) in Kenya, establish guidelines for licensing, capital adequacy, and risk management.
These regulations ensure that SACCOs operate transparently and sustainably, protecting members’ investments. Compliance with these frameworks is monitored through periodic audits and reporting requirements, reinforcing good governance practices.