SACCO vs Bank Loan in Kenya 2026: Complete Cost Comparison
Wondering whether to borrow from your SACCO or a bank? This guide breaks down the true cost of each option with real calculations.
Quick Comparison: SACCO vs Bank Loans
| Factor | SACCO Loan | Bank Personal Loan |
| Interest Rate | 10-14% p.a. (reducing) | 13-19% p.a. (reducing) |
| Processing Fee | 0-1% | 2.5-5% |
| Insurance | Often included | Additional 1-2% |
| Approval Time | 24-72 hours | 3-14 days |
| Maximum Amount | 3-4x deposits | Based on salary |
| Collateral | Deposits + guarantors | Salary/assets |
| Dividends | Yes (8-20%) | No |
Real Cost Example: KES 500,000 Loan for 3 Years
SACCO Loan (Mwalimu National at 12%)
- Principal: KES 500,000
- Interest Rate: 12% p.a. reducing balance
- Processing Fee: 1% (KES 5,000)
- Total Interest: KES 99,360
- Total Cost: KES 604,360
- Monthly Payment: KES 16,788
Bank Loan (Average at 16%)
- Principal: KES 500,000
- Interest Rate: 16% p.a. reducing balance
- Processing Fee: 3% (KES 15,000)
- Insurance: 1.5% (KES 7,500)
- Total Interest: KES 134,880
- Total Cost: KES 657,380
- Monthly Payment: KES 18,260
SACCO saves you: KES 53,020 (8% cheaper)
The Hidden SACCO Advantage: Dividends
Many forget that while you're repaying a SACCO loan, your deposits continue earning dividends.
Example with Ports SACCO (20% dividend):
- If you have KES 200,000 in deposits
- Annual dividend: KES 40,000
- Over 3 years: KES 120,000
This effectively makes your SACCO loan nearly FREE!
Top SACCOs by Dividend (2024)
| SACCO | Dividend on Shares | Deposit Interest |
| Ports SACCO | 20% | 12.5% |
| Nation SACCO | 20% | 11% |
| Nyati SACCO | 20%+ | Varies |
| Winas SACCO | 16.5% | 12.5% |
| Cosmopolitan | 16% | 12.4% |
When to Choose a Bank Loan
Banks may be better if:
- You need money immediately (some banks approve in hours)
- You're not a SACCO member (joining takes 6 months to qualify)
- You need more than 4x your deposits
- You don't have guarantors
When to Choose a SACCO Loan
SACCOs are better if:
- You're already a member with deposits
- You can wait 24-72 hours
- You want the lowest total cost
- You want to earn dividends while repaying
How to Join a SACCO
- Find the right SACCO - Choose based on your employer or open-membership SACCOs
- Pay registration fee - Usually KES 500-5,000
- Start monthly contributions - Minimum KES 1,000-5,000
- Wait 6 months - Most require this before borrowing
- Apply for loan - Up to 3-4x your deposits
Best Open-Membership SACCOs
If you're not tied to an employer SACCO:
- Winas SACCO - 16.5% dividend, KES 14.4B assets
- Cosmopolitan SACCO - 16% dividend, open to all
- Trans-Nation SACCO - 15% dividend, 100k+ members
- Unaitas SACCO - Nationwide branches
Conclusion
For most Kenyans, SACCO loans are 8-15% cheaper than bank loans when you factor in lower interest rates, minimal fees, and dividend earnings.
The catch? You need to be a member for 6 months and have built up deposits. If you're planning a major purchase, start saving in a SACCO today.
Compare SACCO loans on PesaMarket: /sacco-loans