What is Core Capital?
Core capital is the permanent capital of a SACCO as defined in the applicable regulations, typically comprising fully paid-up members' share capital, disclosed reserves and retained earnings. It excludes balances that members can withdraw, because withdrawable money cannot serve as a permanent buffer against loss.
A real Kenyan example
A SACCO building its core capital retains a portion of surplus rather than distributing all of it, which reduces this year's dividend and strengthens the institution.
Why it matters
Core capital is the measure regulators use to judge whether a SACCO is durable. It also explains a tension members feel directly: every shilling retained to build capital is a shilling not distributed, and the board has to defend that trade-off at the annual general meeting.