SACCO Loan Guarantor in Kenya: 7 Key Risks, Rights and How to Get Released

Updated 7 November 2026

A SACCO loan guarantor is a member who pledges their own deposits so that another member can borrow more than their own savings allow. If the borrower stops paying, the SACCO can turn to the guarantors, often by holding or offsetting their deposits. Before you sign, you should know how much you are exposed to, when the SACCO can come after you and how to be released.

Checked on 7 November 2026 against official FAQs from Kenya National Police DT SACCO and Unaitas SACCO, and a commentary by FHC on Co-operative Tribunal case 57 of 2021 involving Mwalimu National SACCO. Rules differ between SACCOs; your SACCO’s by-laws and loan form govern your case.

Contents: How guarantees work · Seven risks · Tribunal case · Getting released · Before you sign · If the borrower defaults · FAQ

How SACCO guarantees work

Most deposit-taking SACCOs lend a multiple of a member’s deposits. Kenya National Police DT SACCO, for example, lets members borrow up to three times their savings, subject to the rule that at least a third of net pay remains after deductions. Its FAQ says BOSA loans “must be fully guaranteed by members”, and that the guarantors’ and applicant’s deposits must together be equal to or more than the loan applied for. Guarantors must be active members who have contributed for at least six months.

So as a SACCO loan guarantor, if you have KSh 300,000 in deposits and guarantee KSh 100,000 of a friend’s loan, that part of your deposits is tied to the friend’s loan until it is repaid or the guarantee is replaced.

Seven risks for a SACCO loan guarantor

1. Your deposits can be held. Guaranteed amounts are security for someone else’s loan.
2. Your own borrowing shrinks. Deposits pledged for another member usually reduce how much you can borrow yourself.
3. You may struggle to exit. Police SACCO says a member who wants to leave must clear all liabilities and replace all the members they have guaranteed, and withdrawal takes 60 days after the notice is acknowledged.
4. Recovery from you if the borrower defaults. Depending on the by-laws and the form you signed, the SACCO may offset your deposits or recover from your salary.
5. Self-guarantee limits. Police SACCO allows self-guarantee only if the loan is no more than your deposits and you have no other guarantor liability.
6. Long loan terms. A long-term development loan can keep your deposits tied up for years.
7. Family pressure. Guarantee requests often come from relatives or colleagues, which makes it hard to say no or to chase repayment.

What the Co-operative Tribunal said about recovering from guarantors

In Co-operative Tribunal case 57 of 2021, Samuel Odhiambo Okope and two others v Mwalimu National SACCO, guarantors challenged the SACCO’s attachment of their assets after a borrower defaulted on about KSh 1.02 million. According to FHC’s commentary, the tribunal found for the guarantors and held that the SACCO had to show it had pursued other ways of collecting from the borrower, including the tribunal route set out in its by-laws, before attaching guarantors’ assets.

For any SACCO loan guarantor, note that this was one tribunal decision on one SACCO’s by-laws, so it is not a guarantee that every SACCO must act the same way. It does show why you should read your SACCO’s recovery rules and ask what steps it takes against the borrower first.

How to get released as a SACCO loan guarantor

• Loan repaid. Your guarantee ends when the loan is fully repaid. Ask for written confirmation.
• Replacement. Many SACCOs let a borrower replace a guarantor with another member who has enough free deposits. Ask the borrower to arrange it, then confirm with the SACCO.
• Borrower’s own deposits. Some SACCOs release guarantors as the borrower’s deposits grow to cover the remaining balance. Ask your SACCO whether this applies.
• Refund timing. Unaitas says deposits raised during a loan application are refunded 90 days after full repayment. Check your SACCO’s waiting period.

Checks before you agree to be a SACCO loan guarantor

1. Ask for the loan amount, term and monthly instalment, and check whether the borrower can afford it.
2. Agree on the exact amount you will guarantee and make sure the form shows it.
3. Read the recovery clause: deposits only, or salary as well?
4. Check how the pledge affects your own planned borrowing.
5. Ask how you will be told if repayments stop. Some SACCOs send guarantor statements or SMS alerts.
6. Keep copies of everything you sign.

What a SACCO loan guarantor should do if the borrower defaults

Act early. Ask the SACCO for a statement of the loan and your liability. Contact the borrower and agree a plan to bring the loan up to date or replace you. If the SACCO moves to recover from you, ask in writing what steps it has taken against the borrower, and check your by-laws. Disputes between a member and a co-operative can be taken to the Co-operative Tribunal. If you suspect fraud in how the loan was approved or recovered, see our guide on how to report SACCO fraud to SASRA. Members abroad can review diaspora SACCOs before taking on guarantees from a distance.

Frequently asked questions

Can a SACCO take a guarantor’s deposits?

Often yes, if the borrower defaults and the by-laws and the guarantee form allow it. In one 2021 case, the Co-operative Tribunal required Mwalimu SACCO to pursue the borrower first.

How do I stop being a SACCO loan guarantor?

A SACCO loan guarantor is released when the loan is repaid, or when the borrower replaces you with another eligible member. Get written confirmation from the SACCO.

Can I leave a SACCO while I am a guarantor?

Usually not until you are replaced. Police SACCO requires leaving members to replace everyone they have guaranteed and to clear their liabilities.

Can I guarantee my own SACCO loan?

Some SACCOs allow it. Police SACCO permits self-guarantee if the loan does not exceed your deposits and you have no other guarantor liability.