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SACCO FAQs
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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, labor 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, color, 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.
Why Form a SACCO?
To have easy access to Safe and Sound Financial Services in a Convenient and sustainable
manner
WHAT YOU NEED TO KNOW BEFORE FORMING A SACCO
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
Target numbers to be raised before a SACCO opens for formal operations.
Why Form a SACCO?
To have easy access to Safe and Sound Financial Services in a Convenient and sustainable
manner
Why Join a 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 pre -
determined, 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.
What SACCOS offer Members?
Shares:
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.
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.
Loans:
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.
Steps of Forming a SACCO
Steps 1
Community members with a common bond come together to discuss.
They identify their needs and problems and discuss how to address and solve them.
Some of their needs can be solved by accessing financial services by establishing their own
financial institution
Step 2
Formation of a task force committee to steer, propagate and sell the idea to other potential
members of the community.
Step 3
Task force mobilizes other potential members and enlists their support to participate in
formation of a SACCO.
Step 4.
A general meeting should be convened to deliberate on the idea. Several stakeholders can
attend. Step 5
At the meeting, sensitization on the need for starting a SACCO is done.
Step 6
An interim committee is elected from the people in attendance. Interim committee holds office
until the first AGM is held. This meeting also deliberates upon the following;
Area to be covered by the SACCO
Name of the SACCO
Qualifications for membership
Share capital and membership fees
Location of the cooperative society offices etc.
Step 7
Interim committee obtains the required stationery and start collecting money from people
interested in becoming members of a SACCO.
Step 8
Interim committee arranges for more training and public awareness generation and
sensitization of potential members in order to recruit more members.
Step 10
Interim committee in collaboration with technical support providers’ e.g. UCSCU and District
Commercial Officers (DCOs) draft by laws for the SACCO
Step 12
Interim committee should be processing registration papers with The Registrar of Cooperatives
Step 13
When registration has been done, call first general meeting to elect committee members
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