Many perceive Savings and Credit Cooperative Societies (Saccos) primarily as “loan machines,” believing their contributions are locked away solely to qualify for borrowing. This common misconception overlooks the diverse savings products that Saccos offer, positioning them as comprehensive platforms for saving, investing, and wealth building.
According to the Sacco Societies Regulatory Authority (SASRA), Saccos fall into two main categories: Deposit-Taking (DT) Saccos, which provide front-office services similar to banks, and Non-Withdrawable Deposit-Taking (NWDT) ones focused mainly on lending from member contributions. Understanding the distinctions between savings types can help members maximise benefits beyond loans.
Share Capital represents a member’s ownership stake in the Sacco. It is typically non-withdrawable during active membership and can only be refunded upon exit. This capital grants voting rights at annual general meetings and entitles members to dividends, forming the stable equity base of the Society.
Non-withdrawable Deposits (often called BOSA) build loan eligibility—commonly offering multipliers of 3 to 10 times the savings—and earn interest or rebates. These funds serve as security for the Sacco’s lending pool and are generally accessible only upon membership withdrawal or under specific notice periods, which explains the widespread “locked money” perception.
However, many DT-Saccos provide genuine flexibility through Withdrawable Savings/ Current accounts. These function like ordinary bank savings or transactional accounts, allowing deposits and withdrawals for daily needs, emergencies, or planned expenses, subject to the Sacco’s terms.
Target Savings products cater to specific goals such as school fees, holidays, land purchase, or business expansion. Withdrawal timelines vary—some are flexible, while others align with the intended purpose. Fixed or Term Deposits lock funds for a defined period in exchange for higher returns, with full access at maturity. Premature withdrawal may attract penalties.
Prominent examples include Kenya National Police Sacco, which offers withdrawable options like Prime and Flex accounts alongside non-withdrawable Alpha Deposits, and Tower Sacco with accessible savings channels via mobile banking.
Experts emphasise that Saccos regulated by SASRA provide a safe, member-owned alternative to traditional banks, with deposits protected through strict governance and liquidity requirements. By diversifying across account types, members can build emergency buffers, earn competitive returns, and access affordable credit when needed.
The truth: A Sacco is far more than a borrowing tool. It serves as a holistic financial partner for long-term wealth creation. Members are encouraged to review their Sacco’s product list and by-laws to fully leverage these opportunities.
SUMMARY
- Share Capital
This is ownership money in the Sacco. It usually cannot be withdrawn unless you exit membership. It gives you voting rights and dividends.
- Deposits / Non-withdrawable Savings
These build your loan eligibility and earn interest. They act as security for loans, which is why many people assume Sacco money is only accessible through borrowing.
- Withdrawable Savings
Some Saccos offer ordinary savings accounts where members can save and withdraw like a bank account, depending on terms.
- Target Savings
Savings for school fees, holidays, emergencies, land, or business goals. Some have flexible withdrawal timelines.
- Fixed or Investment Savings
Money is locked for a specific period to earn higher returns, then withdrawn at maturity.
