History Of Saccos In Kenya Economics

Table of Content

A Savings and Credit Cooperative is a type of concerted whose aim is to pool nest eggs for the members and in bend provide them with recognition installations ( UN-HABITAT, 2010 ) . The general aim of SACCOs is to advance the economic involvements and general public assistance of its members.

The ICA Statement on the Co-operative Identity defines a co-op as an independent association of individuals united voluntarily to run into their common economic, societal, and cultural demands and aspirations through a jointly owned and democratically controlled endeavor.

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Co-operatives are based on the values of self-help, self-responsibility, democracy, equality, equity and solidarity. Co-operative members believe in the ethical values of honestness, openness, societal duty, and caring for others ( Bibby & A ; Shaw, 2005 ) .

The 1995 ICA Congress besides reformulated seven rules of co-operatives.

In drumhead, they are:

  1. Voluntary and unfastened rank
  2. Democratic member control
  3. Member economic engagement
  4. Autonomy and independency
  5. Education, preparation and information
  6. Co-operation among co-operatives
  7. Concern for the community

Different SACCOs supply a figure of merchandises which include but are non limited to recognition services, sedimentation and nest eggs installation, check glade, bankers ‘ checks, standing orders, safe detention, and salary progresss.

History of SACCOs

The innovators of modern cooperation emerged in working- category environments in European Industrial metropoliss of the nineteenth Century. In the 1840s, the first to industrialise states ( Great Britain and France ) , innovators of co-operative invented theoretical accounts of the consumer co-op and the labour co-op to support and advance the involvements of working-class households in the face of the societal catastrophes caused by industrial revolution.

The 2nd coevals of the innovators of modern cooperation emerged, in certain European rural environments in the late nineteenth century. In the 1860s, these innovators created the theoretical accounts of agricultural co-ops and nest eggs and recognition co-ops inspired by the success of the consumer co-ops formula in Great Britain and based on old traditions of rural solidarity aimed to run into the primary economic demands, which went unsated. Agricultural co-ops so enabled households of husbandmans and farm animal raisers to form their ain supply systems of agricultural inputs and market their merchandises and no longer depended on merchandisers and business communities in the metropoliss. The SACCOs helped them to halt depending on usurers and to happen the recognition necessary to overhaul their agricultural co-ops ( Mwakajumilo, 2011 ) .

SACCOs in Africa

In Africa, the thought was brought by a Roman Catholic priest, in Jirapa, a town in Ghana, in 1955. Father John McNulty from Ireland had studied in Canada where he learnt about nest eggs and recognition co-operative societies.

Father McNulty helped the Jirapa villagers to organize a Savings and Credit Co-operative. The co-operative assisted the members to turn to their fiscal jobs which they could n’t separately. Father McNulty trained about 60 people, who were the first successful nest eggs and recognition co-operative innovators on the African continent.

The success of Jirapa nest eggs and recognition co-operative spread throughout Ghana and by 1968, the nest eggs and recognition co-operatives throughout the state came together to organize the Credit Union of Ghana, which was set up to advance, form, service and organize the activities of nest eggs and recognition co-operative in Ghana. ( Alila & A ; Obado, 1990 ) .

Harmonizing to the World Council of Credit Unions ( WOCCU ) 2011 statistical study, there are

51,013 recognition brotherhoods in the universe, holding a sum of 196,498,738 members and a entire incursion of 7.8 % Penetration rate which is calculated by spliting the entire figure of reported recognition brotherhood members by the economically active population age 15-64 old ages old ( World Council of Credit Unions ( WOCCU ) , 2012 ) .

The largest markets in Africa by figure of members as of December 31st 2011 are Kenya ( 4,183,220 ) , Senegal ( 2,231,117 ) , Ivory Coast ( 1,705,712 ) , and Benin ( 1,597,233 ) ( WOCCU, 2012 ) .

History of SACCOs in Kenya

SACCOs in Kenya are presently among the taking beginnings of the co-operative recognition for socio-economic development ( Alila & A ; Obado, 1990 ) .Cooperatives in Kenya were started in 1908 and rank was limited to white colonial colonists. The first co-op was established at Lumbwa, present twenty-four hours Kipkelion country. In 1944 colonial officers allowed Africans to organize and fall in co-ops ( Gamba & A ; Komo, 2012 ) .

The initial effort to promote African farming co-operatives was initiated by the demand to implement the recommendations of the ‘Swynnerton Plan ‘ of 1953. The Swynnerton Plan was formulated to better African agriculture, specifically the turning of hard currency harvests and is recorded to hold encouraged the advancement and growing of African co-ops ( Alila & A ; Obado, 1990 ) .

It was at this point that the recommendation that a registrar of co-ops be appointed was made. In 1945, a new Cooperative Societies Ordinance was enacted which allowed African engagement in the concerted motion. In 1946, a section of co-ops was established and a registrar of co-ops appointed. By 1950 most colonial civil retainers began to back up and promote the development of co-ops and by 1952, approximately 160 co-ops had been registered ( Alila & A ; Obado, 1990 ) .

The post-independence epoch saw the rapid addition the in figure of manufacturer organisations and consolidation of the 1s that already existed. At this clip, the authorities saw the concerted motion as a agency for African socialism, and beef uping common ties between the people from different parts of Kenya. In 1963 there were about 1000 co-ops, which quickly grew in figure since so.

Today, the co-operatives are an built-in portion of the Government economic scheme aimed at making income bring forthing chances peculiarly in the rural countries. The co-operative motion has been recognized by the Government as a critical establishment for the mobilisation of human and material resources for assorted development advancement peculiarly in the rural countries where the bulk of people reside, gaining their support chiefly from agribusiness.

The co-operative motion now contributes good over 45 per cent of Kenya ‘s GDP and it is estimated that at least one out of every two Kenyans straight or indirectly derives his/her support from the co-operative motion. Over the old ages, the co-operative motion remained preponderantly agriculturally oriented. However, in the recent yesteryear, the co-operative motion has experienced important variegation in activities and involvements notably nest eggs and recognition. Other non-agro-based co-operatives have besides emerged and ventured into countries such as lodging ; “ Jua-Kali ” , edifice and building, handcrafts, conveyance, little graduated table industries, etc. ( Alila & A ; Obado, 1990 ) .

SACCOs are one of the taking beginnings of rural finance and in many rural countries the local SACCO is the lone supplier of fiscal services. While the exact figure of SACCOs runing in Kenya is non known, estimations range from about 4,000 up to 5,000 ( Financial Sector Deepening ( FSD ) , 2010 ) .

Kingdom SACCO Limited

Kingdom SACCO Society Limited was started by the Life Reformation Centre in 1999 with the purpose of bettering the economic support of its members. It was registered in 21st January, 2000 under the Cooperative Societies Act No.12 of 1997, and it is governed by the SACCO Societies Act of 2008 and its by-laws.

The growing of the SACCO has been high since origin a fact attributed to good administration and leading, staff committedness and effectual backing by members ( Kingdom Sacco Limited, 2011 ) .

Figure Membership Growth Analysis. Beginning: www.kingdomsacco.com


To be a theoretical account SACCO, authorising the community economically and socially.


To advance a savings civilization, and supply low-cost recognition by offering sustainable fiscal solutions to heighten the economic public assistance of our members and stakeholders.


Pamoja Twaimarika

Core Valuess


Having been founded by members with a church based background, it was agreed that Integrity is one of the most defining values that the leading and rank of Kingdom SACCO up clasp.


The SACCO strives to transport out all its traffics in an unfastened mode that is agreeable to members and co-operative values.


The SACCO purposes at run intoing the all member ‘s demands by guaranting that it is set uping necessary and coveted alteration to its operations and merchandises every bit often as needed.

Team Spirit

The SACCO Leadership, direction and members view the SACCO as a household unit and as such ever aim at working together as a squad.


All members are treated every bit without any favouritism and favoritism

Merchandises Offered by Kingdom SACCO

Recognition Facilities

  1. Business Loan
  2. Development Loan
  3. Emergency Loan
  4. School Fees Loan
  5. Supa Loan
  6. Overdraft Loan
  7. Jijenge Loan
  8. Rembesha Maisha Loan

FOSA Histories

  1. Junior Mustard Account
  2. Imara Account
  3. Kings Savingss Account
  4. KSA Corporate Account
  5. Kings Fixed Account

Other Servicess

  1. Cheque Clearing
  2. Safe Detention
  3. Bankers ‘ Checks
  4. Standing Orders
  5. Salary Progress
  6. Night Stop Services

Problem Statement

SACCOs provide a broad scope of merchandises, offer loans that are cheaper than Bankss, supply higher involvement on nest eggs and harmonizing to a survey by FinAccess, a important per centum of the Kenyan population is unbanked ( FinAccess, 2009 ) . This recent survey by the Financial Sector Deepening Trust ( FSDT ) revealed that Bankss serve 14.2 per centum, SACCOs 13.1 per centum and MFIs 1.7 per centum of the population severally. This is a large chance for SACCOs given that there is an untapped market. Since SACCOs do non raise equity from outside beginnings, theirstrength prevarications in Numberss i.e. the more the members, the better it is for the SACCO because this means that higher capital is raised. This survey seeks to happen out how SACCOs are tapping into this ready market, the methods they are utilizing to make this and their effectivity in making this market

Purpose Statement

The intent of this survey is to analyze the enlargement schemes employed by Kingdom SACCO Limited.

Aims of the survey

To place the enlargement schemes employed by Kingdom SACCO Limited

To analyze the execution of enlargement methods employed by Kingdom SACCO Limited

To find the effectivity of the enlargement methods employed by Kingdom SACCO Limited

Research Questions

  1. What are the enlargement schemes employed by Kingdom SACCO Limited?
  2. How are the enlargement schemes employed by Kingdom SACCO Limited implemented?
  3. What are the short falls/gaps of the enlargement schemes employed Kingdom SACCO Limited?

Justification of the survey

The vision held by Kingdom SACCO is to be a theoretical account SACCO. This coupled by the fact that its rank steadily increases every twelvemonth makes it a suited instance to analyze. By analyzing the methods Kingdom SACCO uses to accomplish a steady rank growing, a resource can be created for other SACCOs to reproduce in the state in order to better the incursion and impact of SACCOs in Kenya.

Significance of the survey

The consequences of this survey will seek to profit the Government, the ministries of Finance, and Cooperatives Development in explicating policies refering SACCOs and other fiscal establishments in order to better banking and fiscal services in Kenya. Kingdom SACCO will be able to place those enlargement schemes that are effectual and discard those that are non and so be able to place itself as a theoretical account SACCO, consistent with its vision. Other SACCOs in Kenya will be able identify and implement effectual enlargement schemes in order to hike rank and incursion of fiscal services in Kenya.


  1. This survey will be conducted under the undermentioned premises:
  2. The respondents will supply needed information objectively and to the full
  3. All informations provided by respondents will be right and echt

Scope of Study

This survey will be carried out at Kingdom SACCO Limited. Data will be collected from the top and in-between degree direction at the central office of the SACCO in Githurai, Nairobi

Restrictions and Boundary lines

Since this is a instance survey focused on a individual SACCO, the consequences of the survey can non be attributed to a whole industry as by and large representative. The research worker besides expects that there may be reluctance by the respondents to supply equal handiness of information since most concerns prefer to maintain such informations private. The research worker intends to seek full permission of the SACCO direction to carry on this survey in order to guarantee full cooperation.

Definition of Footings


Back Office Services Activities. The subdivision of any SACCO that provides recognition installations to its members.


An arm of FSD Kenya. FinAccess has been established as the taking beginning of dependable informations on fiscal entree in Kenya and is widely cited in the media and by Government, the private sector and international development spouses.


Front Office Services Activities. A service provided by SACCOs that enables its members to lodge and retreat hard currency from or into their histories merely like a bank.


The Kenya Financial Sector Deepening ( FSD ) programme was established in early 2005 to back up the development of fiscal markets in Kenya as a agency to excite wealth creative activity and cut down poorness. Working in partnership with the fiscal services industry, the programme ‘s end is to spread out entree to fiscal services among lower income families and smaller endeavors. It operates as an independent trust under the supervising of professional legal guardians, KPMG Kenya, with policy counsel from a Programme Investment Committee ( PIC ) . In add-on to the Government of Kenya, funders include the UK ‘s Department for International Development ( DFID ) , the World Bank, the Swedish International Development Agency ( SIDA ) , Agence Francaise de Developpement ( AFD ) and the Bill and Melinda Gates Foundation.


International Co-operative Alliance. The ICA was established in 1895, and brings together over 230 attached organic structures from more than a 100 states. In entire, the ICA represents an estimated 760 million co-operative members worldwide.


Kings Savings Account. A service provided by Kingdom SACCO that enables members to do their nest eggs. It is available for persons and corporates


Savingss and Credit Cooperatives

Safe Detention

A service offered by Kingdom SACCO for the safe maintaining of valuables.


The World Council of Credit Unions ( WOCCU ) . Established in 1970 with a rank from recognition brotherhoods and co-operative fiscal establishments in 100 States, which between them have over 196 million members.

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