Types of SACCO shares

When joining a Sacco (Savings and Credit Cooperative Organization) in Kenya, understanding the different types of shares available is crucial for making informed investment decisions. Shares in a Sacco are essentially units of ownership and can significantly impact your financial returns and benefits. Here’s a breakdown of the main types of Sacco shares you might encounter:
Member Shares
Purpose: Member shares represent the basic form of ownership in a Sacco. They are a fundamental requirement for anyone looking to join a Sacco and signify your stake in the cooperative.
Features:
- Ownership Stake: These shares reflect your financial commitment to the Sacco and demonstrate your role as a co-owner.
- Required Purchase: The number of member shares required varies from one Sacco to another. This amount is usually stipulated in the Sacco’s membership guidelines.
- Non-Withdrawable: Member shares typically cannot be easily cashed out. They are intended to remain with the Sacco for as long as you are a member, serving as a form of savings within the cooperative.
Investment Shares (Optional Shares)
Purpose: Investment shares are additional shares that members can purchase beyond the required member shares. They are meant for those who want to invest more in the Sacco and potentially earn higher returns.
Features
- Voluntary Purchase: Unlike member shares, investment shares are not mandatory. Members can choose to buy these shares based on their financial capacity and investment goals.
- Higher Dividends: Investment shares often yield higher dividends compared to member shares, providing a greater incentive for those looking to enhance their investment.
- Terms and Conditions: The specifics regarding dividend rates and withdrawal policies for investment shares are usually detailed in the Sacco’s bylaws. These terms can vary widely between different Saccos.
- Withdrawability: Investment shares might be withdrawable, but this depends on the Sacco’s rules. It’s important to review these rules to understand the conditions under which you can redeem your shares.