Understanding SACCO Terminology: A Glossary for Kenyan Savers

Updated 19 October 2026

Kenyan SACCO conversations are full of jargon: BOSA, FOSA, core capital, non-withdrawable deposits, by-laws and SASRA. Mixing the terms up is how members sign for products they do not understand, or how committees miss licensing rules. This glossary explains the words you will meet in the Sacco Societies Act (Cap. 490B), the Co-operative Societies Act (Cap. 490) and SASRA’s own FAQs, in plain language for savers and boards.

In this guide

1. How SACCOs are regulated
2. Core glossary A to Z
3. Loan words members meet every day
4. Quick checks before you join or renew
5. Frequently asked questions

How SACCOs are regulated

A SACCO is a savings and credit co-operative: members own it and are also its customers. Registration of the co-operative society sits under the Co-operative Societies Act. Licensing and prudential supervision of deposit-taking and specified non-deposit-taking SACCO business sit under the Sacco Societies Act and SASRA (the Sacco Societies Regulatory Authority). Where both Acts apply, the Sacco Societies Act prevails on SACCO supervision matters. For the wider licensed sector, see our SASRA licensed SACCOs list. If you are starting one, read how to register a SACCO in Kenya.

Core glossary A to Z

Associate

In the Sacco Societies Act, an associate can be a related company or, for an individual, a close family member or a company they control. The definition matters for lending limits and conflict-of-interest rules.

Board of directors

The governing body elected under the Co-operative Societies Act and the SACCO’s by-laws. Directors set policy; day-to-day work sits with management. SASRA looks at governance quality when it licenses and inspects.

BOSA (Back Office Service Activity)

SASRA describes BOSA as the back-office side of SACCO business. In non-deposit-taking SACCOs, member savings used as loan collateral are not withdrawable on demand; members usually access them by taking a loan or exiting the SACCO. BOSA is often contrasted with FOSA.

By-laws

The internal rules of the co-operative, registered with the commissioner responsible for co-operatives. They cover membership, shares, meetings, lending and how the board is elected. Changing by-laws is not a casual committee decision; it follows the Act and registration process.

Core capital

Under the Sacco Societies Act, core capital means fully paid-up members’ shares, capital issued, disclosed reserves, retained earnings, grants and donations that are not meant to be spent except on liquidation. Capital adequacy ratios are built from this base. Weak core capital is a common reason SASRA restricts growth.

Deposit / deposit-taking business

A deposit is money received on terms that it will be repaid, with or without interest, on demand or as agreed. Deposit-taking SACCO business (often linked to FOSA) lets members hold withdrawable deposits. Only SACCOs licensed by SASRA for deposit-taking may run that business.

Dividend

A share of surplus paid on members’ share capital when the AGM approves it, subject to the by-laws and prudential rules. It is not the same as interest on deposits. Use our SACCO dividend calculator to model scenarios once you know the declared rate.

FOSA (Front Office Service Activity)

Front-office banking-style services: withdrawable savings accounts, salaries, standing orders and related products. FOSA sits with deposit-taking licensing. A SACCO advertising FOSA without a SASRA deposit-taking licence is a red flag.

Member

A person (or qualifying group, where by-laws allow) admitted under the by-laws, holding shares and with rights to vote and borrow subject to policy. Common bond rules (employer, industry, geography) still shape many SACCOs even as digital SACCOs widen reach.

Non-deposit-taking (NDT) SACCO / non-withdrawable deposits

SASRA’s FAQs: non-deposit-taking SACCOs mobilise savings that are used mainly as collateral for credit. Those savings are not withdrawable like a bank account; refunds usually happen when a member exits. From 2021, specified NDT SACCOs (including those with member deposits of KSh 100 million or more, digital or diaspora-facing models) need SASRA authorisation under the Non-Deposit Taking SACCO Regulations, 2020.

Non-withdrawable deposits threshold (KSh 100 million)

SASRA’s FAQ states that NDT SACCOs holding members’ deposits of KSh 100 million or more, plus certain digital and diaspora models, fall under the specified NDT regime and must seek authorisation. Application processing is listed at KSh 3,000, with annual renewal fees (SASRA quotes KSh 30,000 for head office and KSh 10,000 per authorised place of business in its FAQ).

Officer

A person charged with management or governance functions as defined in the Acts and regulations. Fit-and-proper standards apply for key officers in supervised SACCOs.

Share capital

Permanent member capital. Shares are not a substitute for a savings account; they usually earn dividends, not withdrawable interest, and may be required before you borrow.

SASRA

The Sacco Societies Regulatory Authority, set up under the Sacco Societies Act No. 14 of 2008. It licenses deposit-taking SACCOs, authorises specified non-deposit-taking SACCOs, and supervises both. It sits under the State Department for Cooperatives.

Supervisory committee

An internal oversight organ under co-operative law that reviews board and management conduct and reports to members. It is not a substitute for external audit or SASRA inspection.

Loan words members meet every day

• Multiplier / leverage: how many times your deposits or shares you may borrow (for example 3 times), set in the credit policy.
• Guarantors: members who pledge their deposits to secure your loan.
• Offset: using your deposits to clear a defaulted loan.
• Top-up: increasing an existing loan after partial repayment, subject to policy.
• Emergency loan: a small, faster facility with tighter limits.

Before you commit, run the numbers with a loan affordability calculator and read the credit policy, not only the marketing flier.

Quick checks before you join or renew

• Is the SACCO on SASRA’s licensed or authorised lists for the product it sells?
• Are your savings withdrawable (FOSA) or non-withdrawable (typical BOSA NDT)?
• What is the share capital requirement and the dividend history?
• What are the loan multipliers, interest, fees and guarantor rules?
• Where are AGM minutes and audited accounts published to members?

Frequently asked questions

What does SACCO stand for?

Savings and Credit Co-operative. It is a co-operative that focuses on member savings and affordable credit.

What is the difference between BOSA and FOSA?

BOSA is back-office savings-and-credit activity, often with non-withdrawable deposits used as loan collateral. FOSA is front-office, bank-like withdrawable deposit services that need deposit-taking licensing.

Who regulates SACCOs in Kenya?

SASRA supervises deposit-taking and specified non-deposit-taking SACCO business under the Sacco Societies Act. Co-operative registration still involves the commissioner under the Co-operative Societies Act.

What is core capital?

Paid-up shares, disclosed reserves, retained earnings and similar permanent capital that underpins prudential ratios. It is not the same as your withdrawable savings balance.

Do all SACCOs need a SASRA licence?

Deposit-taking SACCOs need a SASRA licence. Specified non-deposit-taking SACCOs need SASRA authorisation under the 2020 NDT regulations. Smaller BOSA-only societies outside the specified thresholds still follow co-operative law and may face different oversight.