Reference

SACCO glossary: key terms explained

The words SACCO staff, boards and members use every day, explained in plain English. Links point to fuller guides where there is one.

By the SaccoMonitor team · Updated 24 September 2026 · 8 min read

SACCO term

Portfolio at risk

Loans with any overdue instalment ÷ all outstanding principal.

SACCO term

Reducing balance

Interest on the amount still owed; equal instalments.

SACCO term

Trial balance

Every account’s balance; debits must equal credits.

Terms A–Z

Arrears: Amounts that are overdue on a loan.
Audit trail: A permanent record of who changed what, when, and the values before and after.
Balance sheet: Assets, liabilities and equity at a date.
Chart of accounts: The list of all ledger accounts, grouped into assets, liabilities, equity, income and expenses.
Collateral: An asset pledged to secure a loan, such as a land title or vehicle logbook.
Compulsory savings: Regular savings every member must make, often a condition for borrowing.
Declining-balance interest: Loan interest on the amount still owed, with equal principal each instalment, so instalments fall over time.
Double-entry accounting: Recording every transaction as equal debits and credits so the books always balance.
Fixed deposit: Money committed for an agreed term at an agreed rate, paid out or renewed at maturity.
Flat interest: Loan interest charged on the original amount for the whole term.
General ledger: The record of every posting to every account, with running balances.
Grace period: Days after a due date before a late-payment penalty applies.
Guarantor: A member who agrees to repay a loan if the borrower does not, usually backed by their own savings.
Income statement: Income less expenses for a period: the surplus or deficit.
Journal entry: One balanced set of debits and credits describing a transaction.
Loan rescheduling: Replacing a struggling loan’s remaining schedule with new terms.
Loan top-up: A new, larger loan that first pays off the running loan and pays the rest to the member.
Maker–checker: A control in which one person captures a transaction and a different person approves it.
Minimum balance: The amount that must stay in a savings account; withdrawals cannot go below it.
Portfolio at risk (PAR): Outstanding principal of loans with overdue instalments, as a share of all outstanding principal.
Reducing-balance interest: Loan interest charged on the amount still owed, with equal instalments.
Repayment schedule: The list of instalments, each with its due date, principal and interest.
Reversal: A new entry that exactly undoes an earlier one, leaving both on record.
SACCO: Savings and credit cooperative organisation: a member-owned cooperative in which members save, buy shares and borrow from the pooled funds.
Savings (deposits): Money members place with the SACCO that must be repaid to them. A liability for the SACCO.
Share capital: Members’ ownership stake in the SACCO, bought in whole shares at the share price. Equity, not a deposit.
Trial balance: A list of all account balances at a date, checking that debits equal credits.
Write-off: Removing an unrecoverable loan from loans receivable and charging it to an expense.