Nowadays, the number of Sacco’s in Kenya has grown rapidly. A Sacco is a very effective way of saving and way to access quick and cheap means of raising capital. The Sacco as an entity has power that comes from having members and regular income from contributions.
Types of Sacco’s
Non deposit taking Sacco – They are registered by the commissioner for cooperative development to mobilize saving from their members and also provide credit facilities against the collateral of such savings. They are governed under the Cooperative societies Act, and are not authorized to take withdraw-able deposits or present themselves to the public as deposit taking entities
Procedure for Registration
1. Formal request in writing to the commissioner for cooperative development with intent for the formation of a non-deposit taking Sacco
2. Proposed Names for Search and approval
3. Objectives of the society
4. The number of members in the society ( at least 10 members)
5. The name, occupation and postal addresses of the chairman, treasurer and secretary
6. Proposed physical address of the society, address includes road, plot number, town and county
7. Constitution of the society
8. Sacco Registration Forms
Upon provision of the above the cooperative officer shall convene a meeting within a week with the proposed members, the main agenda being pre cooperative education. Other requirements for the registration shall be communicated at this point. Upon approval of the Name and Registration the Sacco is required to convene the first general meeting with a month after receipt of the certificate.
Deposit taking Sacco – They are licensed and regulated by Sacco Societies Regulatory Authority(SASRA). Besides the basic saving and credit products they also provide basic banking services ie they demand deposits, provide payment services and some even provide ATMs.
Procedure for Registration
1. The Sacco has to provide a minimum core capital of Kshs 10 million as shown in their financial or through submission of bank statements
2. All directors and senior management will be subject to a fit and proper test vetting their moral and professional suitability to be on the board and to manage the Sacco Society Respectively.
3. A detailed four year business plan and feasibility study including projected financial statements.
4. Fill in and submit application forms to SASRA and required documents
5. If satisfied SASRA will issue a letter of intent, upon which the Sacco will be required to set up its business premises, put in place the management information systems and develop a comprehensive risk management framework.
6. Once the above is completed SASRA will conduct an onsite inspection within 30 days and if satisfied will issue a Letter of Compliance to the Sacco within another 30 days.
7. The body will then issue a License upon payment of the stipulated license fees.
8. The estimated time is 4 months for a Sacco that fully complies with all the licensing requirements. The license for deposit taking is renewable annually.
