How Kenyan SACCOs Handle Savings for Deceased Members
- There are hundreds of registered SACCOs in Kenya in the deposit-taking business licensed by the Sacco Societies Regulatory Authority (SASRA)
- Simon Mutuku, a digital marketing officer at Ollin SACCO, explained to TUKO.co.ke how a beneficiary can claim money left behind by a deceased member
- Mutuku outlined the documents required by SACCOs and the steps to follow to claim the money, clarifying the role played by financial institutions
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The management of a SACCO member's savings and other assets upon their death is determined by the SACCO's regulations, applicable national laws, and whether the member has designated beneficiaries.
Source: Twitter
When joining, the majority of SACCOs invite members to designate a beneficiary or next of kin.
The designated beneficiary is entitled to the member's savings in the event of their death.
What happens when a SACCO member dies?
Simon Mutuku, a digital marketing officer at Ollin SACCO, explained exclusively to TUKO.co.ke that to disburse the funds, the SACCO requires formal documentation, including the beneficiary's identification and death certificate.
"SACCO bylaws and national legislation must be followed when handling a deceased member's money, shares, and any outstanding loans. The procedure guarantees that assets are properly transferred to the designated beneficiary and that the member's account is closed," Mutuku expounded.
He did point out, nevertheless, that the SACCO might adhere to national succession regulations (such as intestate succession laws) if no beneficiary was named.
To claim the money in such a situation, the family might have to get letters of administration or a grant of probate.
"SACCOs often require the beneficiary to fill out a claim form, which, when combined with the necessary paperwork, starts the fund release procedure."
Source: Twitter
What steps should a beneficiary follow to access money?
Mutuku stressed that when a SACCO member dies, the first step is to notify the SACCO by submitting the death certificate along with the member's details.
The SACCO then verifies the death and checks if the deceased had nominated a beneficiary.
If a nominee exists, the SACCO proceeds to release the funds to the nominee after verifying the relevant documents.
Once the documentation is in order, the SACCO will ensure that any outstanding loans the deceased member may have had are settled.
Mutuku revealed that if insurance coverage is available, it will clear the loan; otherwise, the balance will be recovered from the member's savings or shares.
"After all processes, the member’s account is closed, or shares may be transferred to a family member," he stated.
Can any family member access the deceased's savings?
The officer reiterated that unless the deceased gave them instructions to manage the account, family members cannot automatically access the savings of a deceased SACCO member.
"Without such a mandate, a family member cannot access the cash until they have completed the required paperwork and followed the law," he clarified.
How do SACCOs help family members after a member dies?
Mutuku observed that after a member dies, several SACCOs provide support services to assist family members in navigating the claims process.
These include:
- Advice and guidance regarding necessary paperwork and protocols.
- Providing claim forms and assisting with their accurate completion.
- Supporting the submission and validation of legal documents, such as probate and death certificates.
- Assisting with customer service via specialised agents or help desks.
- Collaborating with insurance companies occasionally to expedite the processing of loan insurance claims.
"The goal of these support services is to help bereaved families go through the process more easily and with less stress. However, each SACCO has a different level of assistance," Mutuku concluded.
Which Kenyan SACCOs paid high interest rates?
In 2024, the Central Bank of Kenya (CBK) revealed that SACCOs had overtaken banks in loan disbursements to private businesses.
Due to enhanced member confidence, Kenyans' deposits in SACCOs rose by 9.95% to KSh 682.19 billion.
As a result, in January 2025, members of top deposit-taking (DT) SACCOs, such as Tower SACCO and Ports SACCO, received dividends of up to 20%.
Ollin SACCO paid 12.2% interest on member deposits and 17.5% dividends on share capital.
Proofreading by Asher Omondi, copy editor at TUKO.co.ke.
Source: TUKO.co.ke
