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How to Determine Financial Stability of SACCOs in Kenya: Factors to Consider Before Joining

Published 3 weeks ago4 minute read

TUKO.co.ke journalist Japhet Ruto brings over eight years of experience in financial, business, and technology reporting, providing in-depth analysis of Kenyan and global economic trends.

There are several factors to consider before joining a Savings and Credit Cooperative Organisation (SACCO) in Kenya.

Cooperatives CS Wycliffe Oparanya speaks on Feb 26 in Kakamega.
Cooperatives CS Wycliffe Oparanya said those who mismanaged SACCO funds will be charged. Photo: Wycliffe Oparanya.
Source: Twitter

This is because thousands of Kenyans have lost their hard-earned money under unregulated SACCOs, leaving them depressed.

Rufas Kamau, a lead market analyst at FX Pesa EGM Securities, told that Kenyans must handle their financial affairs in a regulated environment to have legal redress if something goes wrong.

All SACCOs in the country are registered and regulated by the Sacco Societies Regulatory Authority (SASRA).

"In this sense, be sure a SACCO has a license from the Sacco Societies Regulatory Authority (SASRA) before joining. Secondly, you should study the SACCO, including how long they have been in business, what services they provide, how well their financial records are doing, and how quickly they are expanding," Kamau advised.

The financial expert said savers should ensure the financial institutions have offices that can be accessed easily by everyone.

"Make sure the SACCO has easily accessible premises, offers competitive interest on deposits and has appropriate saving accounts. Ensure it offers flexible repayment terms and cheap interest rates if you plan to take out a loan in the future," he added.

Shirika Sacco clarified that before registering, one must verify the SACCO's stability (liquidity).

Liquidity refers to the ability of the company to meet its short-term financial obligations, such as loan disbursements and member withdrawals, without facing financial strain.

The SASRA website has the details of the SACCOs that have been granted licences.

"Verify the stability of any SACCO before joining it. How long has it been operating? Does SASRA regulate the SACCO? How efficient is it? Has it digitised its operations?," it told TUKO.co.ke.
SASRA has a list of all regulated SACCOs in Kenya.
SASRA's George Asadhi during the 2025 Coast Region Regulated SACCOs Workshop. Photo: SASRA.
Source: Twitter

In an interview with , personal finance expert Eric Muchoki said the financial history of SACCOs is another factor to consider.

Muchoki asked savers to check the audited accounts of the institutions on their websites.

In Kenya, SACCOs are required to maintain a core capital to total deposits ratio of at least 10%.

"The more financial muscle they have, the better. Examine how consistently they have performed throughout the years in all criteria. The financial health of a SACCO can be determined by looking at audited accounts that are posted on the institution's website and in national newspapers," he explained.

Muchoki noted that SACCOs impose withdrawal fees, which differ depending on the institution.

He revealed that those who register as members must purchase share capital, which is non-refundable if a member decides to leave.

"This is intended to provide the SACCO with financial stability. Each SACCO has a different amount of share capital needed."

Kenyans should think about their financial objectives, liquidity requirements, and risk tolerance when selecting a savings account, according to Margaret Njeri, a financial adviser and coach, who spoke to

She said SACCOs are for long-term savings and not for those who wish to withdraw their money frequently.

"There are several approval stages before withdrawing money from a SACCO. It may be necessary to make a decision three months beforehand, then offer notice, which must then pass through all approval steps."

e earlier reported that the Directorate of Criminal Investigations (DCI) and the National Police Service (NPS) were investigating the fraud case involving the sacco umbrella organisation KUSCCO.

On Thursday, February 13, Milimani Law Courts arrested and charged four suspects connected to the KSh 13 billion scandal.

According to Dolphine Alego, senior principal magistrate, the four and other leaders allegedly plotted to steal more than KSh 82 million, which they then allegedly used to purchase land in Nairobi.

Several SACCOs, including Stima, Ushuru, IG and Tembo reported losses in the scandal.

Proofreading by Japhet Ruto, copy editor at TUKO.co.ke.

Source: TUKO.co.ke

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