Understanding various types of SACCOs

Savings and Credit Cooperative Societies (SACCOs) have emerged as vital pillars of Kenya’s financial landscape, catering to diverse communities and occupational groups with their array of services.
Originating in the early 20th century, SACCOs have evolved into multifaceted entities, playing a pivotal role in promoting financial inclusion and fostering economic development.
Operating on the principle of member ownership and control, SACCOs serve as non-profit organizations offering accessible and affordable financial services to their members.
Their establishment in Kenya dates back to 1965, with the sector experiencing significant growth over the years. Today, SACCOs serve as crucial avenues for low-income communities, supplementing the services provided by traditional banks and empowering members to achieve their financial goals.
SACCOs operate on the principle of mutual assistance, where members pool their resources to provide financial services to one another.
Members contribute regular savings, which are then utilized to provide loans and other financial services. Governance is entrusted to a board of directors elected by the members, with day-to-day operations overseen by a management team.
Types of SACCOs
- Community-Based SACCOs
Community-Based SACCOs are tailored to serve specific communities, such as religious or ethnic groups, or geographic areas. These SACCOs operate on cooperative principles, pooling resources to provide access to credit and other financial services. They play a vital role in promoting financial inclusion, particularly in rural areas, and are increasingly adopting digital solutions to enhance efficiency.
2. Occupational-Based SACCO
Occupational-Based SACCOs cater to specific occupational groups, such as teachers, farmers, or government employees. Members within the same occupation collaborate to improve their financial well-being, with SACCOs offering tailored benefits and services to meet their unique needs.
3. Microfinance SACCOs
Microfinance SACCOs target low-income individuals who lack access to traditional banking services. These SACCOs offer a range of financial products, including savings accounts, loans, and insurance, to support members in improving their economic status.
4. National SACCOs
National SACCOs operate at a national level, serving members from across the country. They typically offer a broader range of services and often collaborate with other financial institutions to expand their reach and service offerings.
SACCOs offer numerous benefits to their members, including access to financial services, diverse financial products, and competitive interest rates on savings. They provide a safe avenue for members to save and invest their money, contributing to their economic empowerment and well-being.