frequently asked questions

What is a cooperative?

A cooperative is an autonomous association of persons united voluntarily to meet their common social and cultural needs and aspirations through jointly owned and democratically controlled enterprises.

Cooperatives are based on the values of self-help, self-responsibility, democracy, equality and solidarity.

A cooperative organization is a body corporate with :

1° legal personality ;

2° power to sue and be sued ;

3° power to enter into contracts ;

4° capacity to hold movable and immovable properties of every description ;

5° ability to do all things necessary for the purpose of and in accordance with its by laws.

A cooperative organization may have a special seal

What do you mean by Savings and Credit Cooperatives ?

Savings and Credit Co-operative (SACCO) is a type of co-operative whose objective is to pool savings for the members and in turn provide them with credit facilities. Other objectives of SACCOs are to encourage thrift amongst the members arid also to encourage them on the proper management of money and proper investments practices. Whereas in urban areas salary and wage earners have formed Urban SACC0s, in rural areas, farmers have formed Rural SACCOs. There are also traders, transport, jua-kali and community based SACCO’s.

Cooperative organisations are guided by which principles ?

Cooperative organizations shall be guided by cooperative principles :

1° voluntary membership and openness ;

2° democratic participation, one member one vote ;

3° participation of each member in the cooperative’s economic growth ;

4° autonomy and independence of each cooperative organization ;

5° education, training and information of the members ;

6° ensuring cooperation among Cooperative Organizations ;

7° concern for development of the community where the Cooperative Organization is located.

Types of Cooperatives ?

Cooperative organizations may carry out activities in all sectors of economic and social life, and are divided into the following categories :

1° production cooperative organizations ;

2° commercial and consumer cooperative organizations ;

3° services cooperative organizations ;

4° multipurpose cooperative organizations.

What is required number for establishing a primary cooperative organization ?

A minimum number required to establish a primary cooperative organization shall be ten (10) persons. They shall not belong to the same family.

No person shall be a member of more than one cooperative organization with similar activities operating in the same area.

What about Cooperative movement structure ?

Cooperative organizations may constitute among themselves Unions, Federations and Confederation for the better management of their property and the defense of their common interests.

A cooperative organization may develop relations with another cooperative organization at national and international levels. Any cooperative, union, federation and confederation of cooperative organizations shall abide by the provisions of this Law.

What is a Specific requirements for savings and credit cooperatives ? A savings and credit cooperative organization shall have an obligation in any case to meet financial requirements and prudential standards set by the national monetary authority.

What are the Conditions for becoming a Cooperative Member ?

In order for a person to be a member of a cooperative organization, he or she shall :

1° be at least sixteen (16) years old or be an emancipated child ;

2° not participate indirectly or directly in any activity competing with the Cooperative Organization for which he or she is a member ;

3° have subscribed and paid up his or her shares in accordance with the by-laws in order to constitute the share capital ;

4° be committed to work thoroughly with the Cooperative Organization in all or part of the operations as provided for in its by-laws ;

5° apply for it and is admitted by the General Assembly.

No person shall be allowed to be a member of a Cooperative Organization in case his or her shares to the share capital and his or her activities in the Cooperative Organization are different








Type of business

Business enterprise

Socio-economic enterprise

Co-operatives are enterprises that care about people. Companies are enterprises that care more about profits


Business Orientation



Companies have a single objective. Co-operatives have multiple objectives




Services to members

Surplus (profits) in Co-operatives comes after satisfying needs of members


Unifying Factor

Capital / Money

Common needs of members

Co-operatives are an association of people. Companies are an “association of capital”



Top management


Decision making in Co-operatives is sometimes slow and may make competition difficult


Handling of profits / surplus

Companies distribute profits according to shareholding

Co-operatives distribute surplus according to level of members patronage to their Co-operative

Low emphasis on profit / surplus makes Co-operatives unable to compete successfully with companies



Follows strict business management principles

Follows business management principles enriched with Co-operative values and principles

Priority of management of companies is profitability. In Co-operatives it is service delivery to satisfy the common social and economic needs of members