Saccos in Kenya



Saccos in Kenya

Saccos in Kenya

The Saccos in Kenya sub-sector  is considered the fastest growing in the cooperative movement. Almost half of the 972 additional cooperative societies and unions registered in 2011 were Saccos.

As at December 31, 2011, there were 6,902 registered Saccos, up from 6,737 in 2010, but only 3,983 were active, with 227 of them, or six per cent, offering deposit-taking services, commonly referred to as Front Office Services Activity (Fosa), an quasi banking enterprise undertaken by licensed Saccos. These societies with Fosas and the other active Saccos operate Back Office Savings Activity (Bosa).

Saccos in Kenya have rapidly grown to be the largest in Africa, accounting for 60, 64, and 63 per cent of the continent’s savings, loan and assets, respectively.

Saccos provide retail services to large numbers of members and depositors. Of Kenya’s 20 million adult population, 22.5 per cent are served by commercial banks and micro finance institutions while 17.6 per cent are served by Saccos.

Saccos in Kenya are gradually responding to the fast changes in the financial environment and are adopting new approaches to the Sacco model. Membership has for long been based on common bonds and knowledge about the borrower. This mechanism, Saccos argue, has enabled them to manage risk, enforce lending contracts and reduce the transaction costs of delivering credit.

With changes that at some stage saw use of Saccos drop from 13.1 per cent in 2006 to 9.0 per cent in 2009 because of stiff competition from banks and other financial institutions, and other factors such as declining membership because of retrenchment and deaths, Saccos were forced to come up with strategies and products to assist them cope with these challenges. Some of these strategies included changing rules of membership and coming up with a new range of products.

Types of Saccos in Kenya

Diaspora Saccos

To ensure they are felt back home, Kenyans in the diaspora have formed Saccos, through which they can invest in property and business.

Diaspora remittances are growing at a rate of 43 per cent year on year. The Diaspora Saccos intend to harness these individual small streams into a mighty river of collective power and channel them into investment projects, which can attract even higher remittances.

The Kenya USA Diaspora Sacco was launched during the 2012 Kenya Diaspora Conference — USA in Arlington, Virginia. This was the second Diaspora Sacco established after the Cooperative Development ministry registered Kenya Diaspora Sacco in April 2012.

The Sacco enables Kenyans living in the United States to access capital and fully participate in emerging markets in Kenya as Well as the opportunities in the East African Community.

The Sacco plans to launch a chapter in every state in the US to make sure every Kenyan living in the US has access to affordable credit.

Kenyans in the United Kingdom also launched a Sacco, which was the third diaspora society.

Youth Saccos in Kenya

With 73 per cent of Kenya’s population under the age of 30 and 43 per cent under the age of 15, the youth factor is an important social-political and economic factor.

The cooperative movement, therefore, has in the past tried to ensure that this populace is absorbed into the sector. The 2011 World Cooperatives Day, popularly referred to as Ushirika Day, celebrations intentionally focused on the youth, under the theme Youth, the Future of Cooperative Enterprise. There is consensus that the youth have not been keen to join the movement because they consider cooperatives as clubs for elderly people.

The Ministry of Cooperatives is working closely with the youths to ensure they provide whatever is close to their hearts.

As part of the efforts, the Cooperative Insurance Company (CIC) in partnership with the Ministry, is involved in promoting the cooperative model of enterprise to the youth, with university students a key target.

A campaign dubbed I’m a Co-operator seeks to impress upon young people the importance of cooperatives as a development tool that can effectively transform lives economically and socially.

Other ventures of interest include the introduction of boda boda businesses in which youths are encouraged to form groups through to buy motorbikes for the boda boda businesses.

Cooperative Bank is targeting the youth with special packages like investing in specific items for their groups, such as motorbikes, vehicles, computers and laptops.

Yet another area of exponential growth is the ICT sector Where

Matatu Saccos in Kenya

To bring sanity to public transport, matatu and bus operators had to organize themselves into cooperatives of companies for ease of management and enforcement of discipline.

It was mandatory for all those seeking a Transport Licensing Board (TLB) certification to be members of a Sacco or belong to a company. About 1,000 matatu Saccos and 400 companies have been registered.

Matatu operators, who constitute 80 per cent of the public transport system, are estimated to have an annual turnover of Kshs73 billion.

To its credit, the sector buys Kshs4 billion insurance premiums every year and remits Kshs1 billion taxes annually.

The Matatu Saccos have played a significant role in the growth of public transport and some have now become respected brands in the sector.

The Saccos proved to be the most viable way to manage large public transport fleets. They have also been pioneers in changing the image of public transport, which was dominated by rogue drivers and touts without regard for traffic rules.

With the expected phasing out of the 14-seater vans, cooperative societies are poised to play an even bigger role in supporting the government’s initiative.

Housing Saccos in Kenya

There are currently 440 housing cooperatives (248 active) under the umbrella of Nachu. With the development of the movement, it’s a guarantee that low income earners can access affordable and decent housing.

Cooperatives have also invested in commercial buildings countrywide.

The landscape of most urban centres is covered by cooperative owned buildings such as Harambee Plaza, Afya Centre, Hazina Towers, Kuscco Centre, Cooperative Bank House, Meru Mwalimu Plaza in Meru and Ndege Chai Plaza in Kericho.

Education Saccos in Kenya

A quarter of the nearly Kshs200 billion goes towards financing education.

Indeed, cooperatives have provided successful models to encourage savings and access affordable credit to about 95 per cent of the 278,000 teachers employed by the TSC and an equal percentage in private learning institutions.

The movement has also invested in training institutions, such as the Cooperative College of Kenya.

Various cooperative societies have directly invested in institutions of higher learning, including Bartek College (Baringo Teachers Sacco), and South Imenti Sacco. Teachers Saccos are instrumental in raising living standards for the members and providing seed money for teachers to start businesses in housing, transport, agriculture and trade.

List of Saccos in Kenya

Sacco’s in Kenya


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Hello, I'm Josphat Gachie, a DIGITAL MEDIA CONSULTANT and the founder of Softkenya.com. Softkenya is Kenya's most comprehensive information website. Hope you will get what you want. WELCOME.