How SACCOs are structured in Kenya

Savings and Credit Co-operatives, commonly known as SACCOs, play a significant role in Kenya’s financial landscape, offering a platform for members to save, access affordable credit, and invest in various ventures. Structured under the Ministry of Cooperative Development and Marketing, SACCOs are regulated by the SACCO Societies Regulatory Authority (SASRA) and governed by bylaws that outline their objectives, membership criteria, and operational guidelines.
Leadership and Membership Structure
SACCOs typically operate under the leadership of a professional management team accountable to a committee elected by members annually. Membership in SACCOs is often restricted to specific industries or sectors, such as the Stima SACCO for power sector employees or the Magereza SACCO for prison services employees.
Management Structure
The governance structure of SACCOs is characterized by a delegates system, with the General Meeting serving as the supreme authority. Delegates, elected regionally based on shareholding, appoint a Board of Directors responsible for policymaking. Executive offices, including the Chairman, Vice Chairman, Honorary Secretary, and Honorary Treasurer, are elected from the Board. The SACCO is managed through various departments overseen by departmental managers, ensuring efficient operations.
The Sacco Board of Directors elect amongst themselves the following executive offices.
- Chairman
- Vice Chairman
- Honorary Secretary
- Honorary Treasurer
There is a Chief Executive Officer who is deputized by the Deputy Chief Executive Officer. The SACCO is managed through departments headed by departmental Managers as follows;
- Finance Department
- Accounts Department
- Credit Department
- Marketing Department
- I.C.T. Department.
- Internal Audit Department
- Research and Development Department
Investment Opportunities
As deposit-taking institutions, SACCOs serve as ideal channels for savings, pooling members’ funds and investing them in authorized instruments like shares, treasury bills, bonds, and occasionally property. Returns on SACCO savings often surpass those offered by traditional banks, with some SACCOs facilitating access to housing at lower rates than commercial mortgages.
Nature of Savings and Borrowing
SACCOs require members to make minimum monthly contributions, fostering a culture of disciplined saving. Funds saved in a SACCO are not readily accessible unless withdrawn or used as collateral for loans, thus promoting responsible financial habits and discouraging impulsive spending. Members can borrow from SACCOs based on their savings, typically up to three times their savings, with the advantage of lower interest rates and stable loan terms compared to commercial banks.