How to know if your SACCO is a Deposit-Taking SACCO or not

Savings and Credit Co-operatives (SACCOs) in Kenya have recently faced scrutiny over issues related to member funds. Understanding the different types of SACCOs can help you make informed decisions about where to save or borrow money.
SACCOs are cooperative organizations where members come together to meet their economic and social needs. They provide financial services, primarily focusing on offering credit and mobilizing savings from their members. There are two main types of SACCOs in Kenya: deposit-taking SACCOs (DT-SACCOs) and non-deposit-taking SACCOs.
Deposit-Taking SACCOs (DT-SACCOs)
DT-SACCOs accept deposits from members and offer services similar to banks, including withdrawable savings accounts. Members can walk into the SACCO’s offices to deposit or withdraw money. These SACCOs are licensed and regulated by the Sacco Societies Regulatory Authority (SASRA), which ensures they meet specific standards.
Non-Deposit-Taking SACCOs
In contrast, non-deposit-taking SACCOs mobilize savings that are used solely as collateral for loans. Members cannot withdraw these savings until they leave the SACCO. These SACCOs do not provide front-office services, meaning members cannot access their funds directly. Instead, they are required to purchase shares in the SACCO.
Differences between Deposit-Taking SACCOs and Non-Deposit-Taking SACCOs
- Withdrawability of Funds: DT-SACCOs allow members to deposit and withdraw money, similar to banks. Non-deposit-taking SACCOs require members to save money without the option to withdraw until they exit the organization.
- Regulation: DT-SACCOs are regulated by SASRA, while non-deposit-taking SACCOs fall under the Department of Co-operatives Development.
When choosing a SACCO, it’s crucial to ensure it is a credible, licensed deposit-taking institution. Be cautious of unlicensed entities or schemes that promise quick, high returns, as these can often be scams.