Understanding the 2/3 rule in Sacco

What is the 2/3 rule in Sacco?
The 2/3 rule in Sacco refers to a government regulation that restricts employers from deducting more than two-thirds of an employee’s salary. This regulation plays a crucial role in loan eligibility assessments within the Sacco framework.
Also Read: How to choose a Sacco in Kenya
To ensure compliance, Sacco considers this rule when evaluating loan eligibility, preventing the deduction of amounts exceeding 2/3 of the salary. Adhering to this rule safeguards employees from excessive salary deductions and ensures a fair and regulated lending environment.
What are the characteristics of a good Sacco?
In fulfilling their designated roles, various Sacco organs and officials adhere to fundamental principles that contribute to effective governance and management. These characteristics define the essence of a well-operated Sacco.
- Participation: Members’ active involvement is vital for governance and management effectiveness. All members, directly or through representative organs, should have a voice in decision-making, fostering a participatory environment devoid of intimidation or undue influence.
- Transparency and Easy Access to Information: The Sacco emphasizes transparency in processes, decisions, and information accessibility. Regular meetings of governance organs, such as the Board and its Sub-Committees, ensure the flow of information, while special resolutions involve inviting all members for crucial matters like bylaw changes.
- Accountability: Decision-makers are accountable to immediate supervisors, higher organs, and ultimately, to the members and communities they serve. Accountability ensures responsible and ethical leadership.
- Consensus Orientation: Sacco organs strive for consensus on critical matters through participatory approaches, transparent systems, and accountability. Openness to differing viewpoints fosters collaborative decision-making.
- Efficiency and Effectiveness: Governance organs establish policies and procedures that yield results meeting the needs of members while utilizing resources efficiently. The focus is on achieving operational goals effectively.
- Equity: All members enjoy equal opportunities without discrimination, ensuring that fairness prevails at all times in the provision of Sacco services.
- Respect for Rules, Policies, and Regulations: Adherence to legal frameworks, bylaws, and operating policies is paramount. Strict enforcement and impartial application of rules contribute to the Sacco’s integrity.
- Strategic and Visionary Leadership: Saccos thrive under leaders and management with a vision for organizational improvement and a commitment to member and community welfare. Leaders should exhibit professionalism and a positive track record.
- Knowledge and Skill in Leadership and Management: Members of governance and management organs possess knowledge and trainability in Sacco governance, management, and operations, ensuring competent leadership.
- Organisational Growth: Governance organs focus on the growth of the Sacco, both in size and operations. Continued growth ensures the Sacco’s long-term survival and sustainability.