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What is SACCO Member Deposits?

SACCO member deposits are the regular contributions a member accumulates, usually monthly and often collected by check-off from salary. They are the balance against which borrowing capacity is calculated, they grow with every contribution, and in the back-office model they are not freely withdrawable while membership continues.

A real Kenyan example

Two members of the same SACCO, one earning twice as much as the other, will often find the one with the longer deposit history can borrow more, because capacity tracks deposits rather than income.

Why it matters

This is the mechanism that makes SACCOs different from banks. A bank generally lends against income; a SACCO generally lends against deposits. It means time in the SACCO is the real asset, and no amount of income compensates for not having started.

FAQs

How do deposits determine how much I can borrow?
Most SACCOs lend a multiple of a member's deposits, less anything already owed to the SACCO, and check that the repayment is affordable. The multiple is set by each SACCO and often differs by product.
Do member deposits earn interest?
Many SACCOs pay interest or a rebate on deposits, decided at the annual general meeting. Whether and how much is paid depends on the SACCO's year, so it is a distribution rather than a promised rate.
Can I stop depositing for a few months?
The consequences differ between SACCOs, from none to a suspension of borrowing eligibility. Ask what happens in a month you cannot pay before you need the answer.
Are my deposits at risk if the SACCO fails?
Members of a SACCO are owners rather than customers of a separate shareholder, so they carry exposure to the institution's performance in a way bank depositors do not. The protections that apply depend on the SACCO's regulatory status and the framework in force, which is a question for the regulator.

Related terms

SACCO Share CapitalLoan MultiplierBOSA (Back Office Service Activity)Check-Off

See all 72 terms