FORMATION OF A SACCO

You may think that a SACCO is just what is needed in your area, but what about the people you hope will join? Before you start, you need to know if people in your proposed common bond really want a SACCO, and you need to know what services they would expect from it.

Asking local people to fill in non-binding pledge forms has been found to be the best way of ascertaining the amount of support that exists for a SACCO. You can also ask people if they would be willing to act as volunteers for the SACCO, either in the setting up stages or when the SACCO is up and running.

The process of developing a business plan is as important as the business plan will give estimates of the expected levels of income and expenditure for the first three years after registration. During this planning process, the team will be able to develop a shared vision of what they want the SACCO to look like.

You must decide on your common bond, and must be able to convince the Financial Services Regulatory Authority that the proposed membership shares a common bond.

You should keep in mind that the common bond should contain a diverse mix of people. You should also find out if there are any other SACCOs in your area, and make your common bond fit accordingly.

Sponsorship will give your project credibility and the image of stability and safety that is needed if people are going to entrust their savings to you. It can also provide the necessary start-up costs to get you through the first three years, by which time you should be sustainable.

Once you have organised a steering group, established that there is a need and desire to use the services of a SACCO in your area, and decided where it is going to be located, you will then need to train staff and volunteers. Training courses may include training for SACCO directors and staff in governance, business planning, operations issue, financial management and internal audit.

The policy and procedures documents will set out how you will operate the SACCO. There will be a policy and procedures manual that will include the policies on who can be a member, how cash is handled and who can have a loan and for how much. It should not contradict legislation. SASCCO / the Cooperative office is able to provide tools to aid the development of these essential documents.

The manual will be the main source of training for new volunteers, and all subjects will be covered by the initial group in their training.

You will need to identify officers of the Board of Directors – who will have overall control of the SACCO. These Directors will include the Chair Person, Treasurer, Secretary and the Vice Chair. You may also need between three and six members of the Credit Committee – who will consider and decide upon applications for loans.

The SACCO must also have a supervisory committee which should ensure that the duties of the officers of the credit union are properly carried out. SASCCO / the Cooperative office can offer further advice on setting up the right boards and committees. An education and training Committee is also needed to help market the SACCO, Recruit new members and organise for their training.

Below is a range of courses that ESASCCO offers under the Education & Training department.

Now the hard work really begins! The pledges need to be turned into members, and the business plan needs to be turned into loans for members, and cash in the bank.

The marketing of the SACCO will now start in earnest. Your launch is a good springboard to let the community know that you are here. A SACCO that is run efficiently, with good marketing, will be able to provide a better service to more people.