How to buy SACCO shares: A step-by-step guide for members

Buying SACCO shares is one of the most rewarding financial decisions a member can make. It not only strengthens your ownership in the cooperative but also opens doors to higher dividends, better loan eligibility, and greater influence in decision-making. For many Kenyans, SACCOs remain the most trusted avenue for saving and investing collectively, making share ownership a cornerstone of financial empowerment.

This article provides a detailed guide on how to buy SACCO shares, what to consider before purchasing, and why owning shares is vital for your financial growth.

SACCO shares represent a member’s permanent ownership in a cooperative. Unlike savings or deposits, which can be withdrawn at will, shares form part of the SACCO’s core capital and cannot be accessed until you leave the SACCO. They signify your stake in the organization and determine your voting rights and entitlement to dividends.

Each SACCO has its own share value and minimum shareholding requirements, as stated in its by-laws. The number of shares you own directly affects your influence within the SACCO and the dividends you receive at the end of each financial year.

Step 1: Join a Registered SACCO

Before you can buy SACCO shares, you must first become a registered member. Most SACCOs require members to meet specific eligibility criteria — such as belonging to a certain profession, institution, or community.

To join, you’ll need to:

Fill out a membership application form
Provide a copy of your national ID or passport
Pay a registration or joining fee (usually between Sh500 and Sh2,000)
Commit to regular savings or share contributions

Once your membership is approved, you gain the right to purchase shares and participate in the cooperative’s activities.

Step 2: Understand the SACCO’s Share Policy

Every SACCO has a unique policy outlining the value of one share, the minimum number of shares required for membership, and the maximum you can hold. For instance, a SACCO may require members to own a minimum of 500 shares, each valued at Sh100, meaning you must contribute at least Sh50,000 to become a full shareholder.

The SACCO’s by-laws also indicate whether shares can be paid for in installments or must be purchased upfront. Reviewing this policy ensures you plan your finances accordingly.

Step 3: Decide How Many Shares to Buy

Once you understand the SACCO’s share structure, determine how many shares you wish to purchase. You can start with the minimum required and gradually increase your shareholding over time.

Many SACCOs allow members to buy additional shares to strengthen their ownership position and boost potential dividends. However, ensure your purchases align with your financial goals and capacity.

Step 4: Make the Payment

After deciding on the number of shares, you can make the payment through any of the SACCO’s accepted channels. Common methods include:

Mobile money (e.g., M-PESA paybill or till number)
Bank transfer or deposit
Cash payment at SACCO offices

Always ensure you receive an official receipt or transaction confirmation for every payment. Once the SACCO verifies your payment, it will record your shareholding in your member account.

Step 5: Obtain a Share Certificate

Upon successful purchase of shares, the SACCO issues a share certificate to confirm your ownership. This document serves as legal proof that you are a shareholder and states the number and value of your shares.

Keep your share certificate safe, as it will be required in case of transfer, sale, or withdrawal of shares when leaving the SACCO.

Step 6: Monitor Your Share Growth and Dividends

SACCOs typically pay dividends annually based on the number of shares you own and the SACCO’s overall performance. These dividends can either be paid directly to your account or reinvested to buy more shares.

It’s advisable to regularly monitor your share statements, attend Annual General Meetings (AGMs), and stay informed about the SACCO’s financial reports. This keeps you updated on dividend declarations, new investment opportunities, and policy changes that may affect your shareholding.

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Benefits of Buying SACCO Shares

Owning shares in a SACCO comes with several financial and governance benefits:

Dividends: Shareholders earn a portion of the SACCO’s profits annually, distributed as dividends.
Voting Rights: Each shareholder has voting power in AGMs, giving you a voice in key decisions.
Loan Eligibility: Shares increase your borrowing limit, as SACCOs often consider shares as collateral.
Ownership: As a shareholder, you co-own the SACCO and benefit from its growth and stability.
Financial Discipline: Buying shares promotes saving habits and long-term wealth accumulation.

Step 7: Know the Rules for Selling or Transferring Shares

SACCO shares are not tradable in the stock market, but they can be sold or transferred under specific conditions. If you wish to exit the SACCO, you can sell your shares to another member or back to the SACCO itself, subject to approval by the management committee.

Transfers are only allowed between registered members to maintain the cooperative’s ownership integrity. Additionally, the value of shares typically remains fixed — only the dividends vary depending on performance.