Kenyans use Chamas and SACCOs to pool savings, invest money and access credit. However, the two structures are not legally the same.
A small group saving for welfare, land or investments may choose a self-help community group structure. A group seeking to operate as a formal savings and credit co-operative follows the co-operative registration framework.
Understanding the difference is important before collecting members’ money.
How to Register a Chama in Kenya
Many informal Chamas formalize their activities through the self-help community group registration framework under the State Department for Social Protection.
The government’s draft Community Groups Registration Regulations, 2025 provide for registration of self-help community groups and require groups to meet the relevant criteria under the law.
Step 1: Form the Group
Members should agree on the group’s purpose, membership rules and activities. The group may focus on welfare, savings, investments, income-generating activities or improving members’ livelihoods.
Step 2: Elect Officials
Members should agree on leadership and management arrangements. These normally include positions such as chairperson, secretary and treasurer.
Step 3: Prepare Group Documents
The group should have clear rules governing its operations. These should cover membership, contributions, leadership, meetings, decision-making and management of group funds.
Members should also keep minutes showing the decision to form the group and elect its officials.
Step 4: Apply for Registration
The group can follow the registration process provided by the relevant government office and current digital channels. Requirements and fees can change, so applicants should confirm the current requirements with the relevant Social Development office before submitting documents. Once approved, the group receives its registration documentation.
How to Register a SACCO in Kenya
A SACCO is a savings and credit co-operative society registered under the co-operative societies framework.
The Cooperative Societies Act provides that a primary co-operative society must have at least 10 qualified persons to qualify for registration.
Step 1: Establish the Common Purpose
Potential members should identify their common bond and agree on the SACCO’s objectives. They should also develop proposed by-laws and an appropriate business plan or feasibility assessment.
Step 2: Hold a Founding Meeting
Members should formally resolve to establish the SACCO and record the decisions in signed minutes. An interim leadership structure can then guide the registration process.
Step 3: Submit the Registration Application
The registration process is handled under the co-operative framework. The application requires documentation such as the proposed by-laws and information about the society and its membership.
The exact requirements should be confirmed with the relevant Co-operative Development office because they can vary depending on the SACCO structure.
Step 4: Obtain SACCO Registration
Once the application meets the legal requirements, the society can receive its certificate of registration. However, registration does not automatically allow a SACCO to conduct deposit-taking business.
When Does SASRA Licensing Apply?
This is where many new SACCO founders get confused.
SASRA regulates SACCO societies in Kenya. It licenses SACCOs undertaking deposit-taking business, commonly associated with FOSA.
The SACCO Societies Act states that no person can conduct deposit-taking business unless the SACCO is registered under the Co-operative Societies Act and holds a valid SASRA licence.
SACCOs undertaking specified non-deposit-taking business may also require SASRA authorisation under the 2020 regulations.
SASRA also publishes the official 2026 list of licensed deposit-taking SACCOs. Members should verify a SACCO’s status before placing money with it.
Chama vs SACCO: Which Should You Choose?
| Feature | Chama / Self-Help Group | SACCO |
|---|---|---|
| Main purpose | Welfare, savings or investment | Structured savings and credit |
| Legal structure | Community/self-help group framework | Co-operative society |
| Minimum membership | Depends on applicable group-registration rules | At least 10 qualified persons for a primary co-operative |
| Regulation | Social/community group framework | Co-operative framework and, where applicable, SASRA |
| Deposit-taking | Not a SACCO banking licence | Requires SASRA licensing where applicable |
| Best suited for | Small, flexible groups | Larger, structured savings and credit operations |
Final Thoughts
The right structure depends on your group’s ambitions. If you mainly want to save, invest together or support members, a formalised Chama or self-help group may be appropriate.
If you want to build a structured savings and credit institution, a SACCO provides a different legal and regulatory pathway.
Before collecting significant member funds, confirm your registration category and the latest requirements with the relevant government regulator.
For SACCOs, always verify whether the institution is licensed or authorised by SASRA for the business it intends to conduct.
