The Risks and Rewards of Investing in SACCOs

Updated 24 October 2026

Savings and credit co-operatives (SACCOs) are one of the most popular ways Kenyans save and borrow. The Sacco Societies Regulatory Authority (SASRA) supervised 355 SACCOs with 7.39 million members at the end of 2024, holding total assets of KSh 1.076 trillion and member deposits of KSh 749.43 billion. Returns have often beaten bank savings, but a SACCO is not a bank, and the risks are real. This guide sets out both sides so you can decide how much to put in and where.

How you earn in a SACCO

Members earn in two ways. Share capital earns a dividend, and non-withdrawable deposits (savings that back your loans) earn interest on deposits. Both are paid once a year after the annual general meeting approves the accounts.

According to SASRA’s 2024 Sacco Supervision Annual Report, regulated SACCOs paid an average dividend of 10.46 percent on share capital in 2024, down from 10.92 percent in 2023. Deposit-taking SACCOs paid 10.54 percent and non-withdrawable deposit-taking SACCOs 10.37 percent. The average interest rate on member deposits fell from 7.45 percent to 7.14 percent, but that was still well above the 4.14 percent average return on bank deposits that the report cited. In total, SACCOs paid KSh 59.74 billion in dividends in 2024, up 8.5 percent from KSh 55.06 billion.

Top performers pay much more. Tower SACCO paid 20 percent on share capital and 13 percent on deposits for 2024, Ports SACCO 20 percent and 12.5 percent, and Ollin SACCO 17.5 percent and 12.2 percent. Returns vary widely, though, so look at a SACCO’s record over several years rather than one good year.

Use our SACCO dividend calculator to estimate what your shares and deposits could earn at different rates.

The rewards

1. Higher returns than most savings accounts

As the SASRA numbers show, deposit interest and dividends have sat well above bank savings rates. Dividends are taxed through a withholding tax deducted before payment, so what reaches you is the net amount.

2. Cheaper loans

Most SACCOs lend up to three or four times your deposits, often at lower rates than banks or digital lenders, and some do not need a CRB check because your deposits and guarantors secure the loan. That makes them useful for school fees, building and business stock.

3. Forced, steady saving

Monthly contributions, often deducted from salary through a check-off system, build a savings habit that is hard to break.

4. Ownership and a vote

Members own the SACCO. You elect the board at the annual general meeting and can question how money is lent and spent.

The risks

1. Your deposits are hard to withdraw

In most SACCOs, deposits are non-withdrawable while you remain a member. To get them back you usually have to resign and give notice, often 60 days or more, and wait until any loans you guaranteed are cleared. Share capital is not refunded at all; you can only sell or transfer it to another member. Treat SACCO savings as long-term money, not an emergency fund.

2. No bank-style deposit insurance

Bank deposits are covered by the Kenya Deposit Insurance Corporation. SACCO deposits are not, so if a SACCO collapses, members can lose savings. Some unregulated co-operatives have failed and left members waiting years for refunds.

3. Guarantor risk

When you guarantee a colleague’s loan and they default, the SACCO can recover the balance from your deposits. Only guarantee people you trust, and keep track of how much you have guaranteed.

4. Falling or skipped dividends

Dividends depend on the SACCO’s surplus. SASRA says the 2024 drop happened largely because it pushed SACCOs to retain more surplus to build capital. Poorly run SACCOs, or those with many bad loans, may pay little or nothing.

5. Governance and employer remittance problems

Weak boards, insider lending and employers who deduct contributions from salaries but do not send them to the SACCO all hurt members. Read the annual report and ask questions at the AGM.

How to reduce the risk

1. Choose a SASRA-regulated SACCO. Deposit-taking SACCOs must be licensed by SASRA, which publishes the list each year. A regulated SACCO must meet capital and liquidity rules and file returns.
2. Read the financial statements. Look for steady growth in deposits, a consistent dividend record and low loan defaults.
3. Understand the by-laws. Check the notice period for withdrawal, the loan multiple, and what happens to your deposits if you leave.
4. Do not put all your savings in one place. Keep an emergency fund somewhere easy to reach, such as a money market fund.
5. Check your statement every year. Make sure the deductions on your payslip match what the SACCO recorded.

New to the jargon? Our SACCO terminology glossary explains share capital, deposits, guarantors and more. To compare a liquid alternative, try the money market fund calculator, and before borrowing elsewhere, check your CRB status.

Is a SACCO right for you?

A SACCO suits people with a steady income who want long-term savings and access to affordable loans, and who are willing to stay a member for years. It suits people who may need their money at short notice less well. For most savers, the best approach is a regulated SACCO for long-term saving and borrowing, alongside a separate, easily accessed emergency fund.

Frequently asked questions

What is the average SACCO dividend in Kenya?

SASRA reported an average dividend of 10.46 percent on share capital for 2024, down from 10.92 percent in 2023.

Are SACCO deposits insured?

No. The Kenya Deposit Insurance Corporation covers bank deposits, not SACCO deposits, so choosing a well-run, SASRA-regulated SACCO matters.

Can I withdraw my SACCO deposits any time?

Usually not. Most SACCOs only refund deposits when you exit, after a notice period and once any loans you guaranteed are settled.

Which SACCOs paid the highest dividends in 2024?

Tower SACCO and Ports SACCO paid 20 percent on share capital, and Ollin SACCO paid 17.5 percent.

Sources: SASRA Sacco Supervision Annual Report 2024 (released September 2025), as reported by Tuko and Sacco Review; Sacco Societies Act.