saccos

Savings and Credit Cooperative Organizations (SACCOs) are member-owned financial cooperatives that provide savings products and credit facilities to their members. SACCOs are built on cooperative principles, including voluntary and open membership, democratic member control (one member, one vote), limited return on capital, and a commitment to community development.

Membership is typically based on a common bond such as employment, residence, industry, or association. Members pool savings into a common fund and are eligible to borrow from it. Loans are usually offered at lower rates and on more flexible terms than those available from commercial lenders. Profits are returned to members as interest on deposits, dividends, or patronage refunds, and governance is by an elected board of directors and a supervisory or audit committee.

SACCOs operate within a regulatory framework that varies by country. They are usually overseen by a national cooperative regulator or the central bank and may be covered by deposit-guarantee schemes. Operational requirements often include minimum capital, liquidity rules, reporting, and member education.

They are an important channel for financial inclusion in many regions, providing accessible savings and credit to individuals who are underserved by traditional banks. Challenges include liquidity management, loan defaults, competition from banks and microfinance institutions, and the need to modernize through digital platforms and robust risk management systems.