Deal with Saccos diligently in property transactions

In 2016, a FinAccess Household Survey conducted by Financial Strength Deepening Kenya, Kenya National Bureau of Statistics and the Central Bank of Kenya established that Saccos performed better than banks in financing land and building transactions.

Interestingly, Saccos are prohibited by the law from purchasing or acquiring land except as may be reasonably necessary for the purpose of conducting their deposit-taking business. Even in such cases, the purchase has to be approved by the Sacco Societies Regulatory Authority (SASRA).

This is one reason why Saccos set up separate legal entities to engage in real estate transactions. Still, the fact that a Sacco is willing to give you a loan to purchase land or a house or is facilitating transactions on behalf of its members does not take away the need to be careful before making a commitment.

It is important to first know whether the land actually belongs to the entity associated with the Sacco through a search at the local land registry.

Secondly, it is advisable to visit the land to confirm its location and condition. Thirdly, it is good to check prices of land around the area. Fourth, it is important to find out the reputation of the Sacco. Above all, it is advisable to seek the counsel of a reputable lawyer.

Various avenues are available to seek redress against a Sacco. Internally, members can complain to the management or the board of the Sacco; externally they can complain to the District Cooperative Officers, SASRA for deposit taking SACCOs, the Cooperative Tribunal for non-deposit taking Saccos, the Ethics Commission for cooperative societies and the Ministry of Industry, Trade and Cooperatives.