Frequently Asked Questions

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Below is a list of Frequently Asked Questions about SACCOs and their Operations

What is a SACCO?

A SACCO is an acronym for Savings and Credit Cooperative Organizations. It is owned, governed and managed by its members who have the same common bond: they may be working for the same employer, belonging to the same church, labour union, social fraternity or living/working in the same community.

A Savings and Credit Cooperative’s membership is open to all who belong to the group, regardless of race, religion, colour, creed, and gender or job status. A SACCO is unique, democratic, member driven and self-help cooperative organization. In a SACCO, members agree to save their money together and offer loans to each other at reasonable rates of interest. Interest is charged on loans, to cover the interest cost on savings and the cost of administration.

SACCO members are the owners and they decide how their money will be used for the benefit of each other. Savings and Credit Cooperatives are democratic organizations and decisions are democratically made. Members elect a board that in turn employs staff to carry out the day-to-day activities of the SACCO.

The number of board members is between nine and fifteen. Members also elect a supervisory committee to perform the function of an internal audit. SACCOs are legal bodies registered under the Uganda Cooperative Statute of 1991 and Cooperative Societies Regulations of 1992.

SACCOs are economic institutions doing business in order to grow, survive and become sustainable.

The minimum number of members required to register a SACCO under the current law is 30 people. However for purposes of accessing external support, a minimum of 300 members may be the basis for selection.

To have easy access to Safe and Sound Financial Services in a Convenient and sustainable manner

  • Not to force anybody to join, only sell ideas and convince
  • Keep minutes of the discussion and meetings held
  • Formulate a Simple plan
  • Document all processes taken, decision agreed upon and strategies laid out
  • Keep a full list of the people (names and addresses) that have enlisted as members
  • Keep an up-to date and correct record of money received from any interested person
  • Minimize expenditure and operate with transparency
  • Study and understand all relevant laws and regulations that govern the cooperative business namely
    • The 1991 Cooperative Statute
    • The 1992 Cooperative Societies Regulations
    • The draft by laws of the SACCO
  • Savings are mobilized locally and returned to members in the form of loans. The money stays and works within the members.
  • Unlike other places where interest rates may not be negotiable and already predetermined, SACCO interest rates are set by the members themselves depending on the circumstances in the community they live.
  • SACCOs encourage members to save as a way of building a resource base for credit.
  • SACCOs educate their members in financial matters by teaching prudent handling of money, how to keep track of finances and how to budget.
  • SACCOs pay dividends on shares to their members once the SACCO is established and profitable. Members therefore take pride in owning their own SACCO.
  • Money borrowed to members in a SACCO is money mobilized by themselves from different sources.
  • SACCOs perform a critical and unique function as financial intermediaries. They mobilize significant volumes of personal savings and channel them into small loans for productive and provident purposes at the community level.
  • Each member of a SACCO is an equal owner of that SACCO and is entitled to one vote at the annual meeting, regardless of how much money he or she has deposited in the SACCO
  • SACCOs promote a social bond and unity among members in the communities they live.

Every potential member must purchase a minimum share as determined by the SACCO making each member an owner of the cooperative. Once the share has been fully paid up, all other contributions will go towards savings.

A member’s monthly contribution is usually split between various types of savings accounts. Savings unlike shares are withdrawn on demand. Each SACCO determines amongst its members what the minimum savings per member will be.

Members are encouraged to save toward loans. Loans are ratio based on member’s savings and shares. Individuals who have established their credit worthiness through regular savings and are able to show ability to repay a loan can earn the privilege of borrowing these savings in the form of a loan. Some loans are made for productive, income generating activities, a business idea; other loans are made for provident purposes such as schools fees, funerals and weddings.

Quick/Emergency loans:
Emergency loans are short-term quick loans available to members to meet unforeseen circumstances, not budgeted for.