As clarified by @faa, 40% is on Share capital ( not on savings) and its upto a max of Kshs 30,000.

Kimisitu is a very solid SACCO


C&P

Dear Valuable Member,

During the last AGM, members approved increase of share capital by Ksh.5,000 annually to KSh. 30,000 by the year 2020.

However, we encourage you to increase your share capital early and stand to gain from the high and attractive rate of return annually (higher than Interest on Deposits)! Dividends on shares payments rate for the last five years at a glance.

Dividend on members' shares(Rate)
Year
2015- 40%
2014-40%
2013-30%
2012-30%
2011-10%

Benefits to you for holding more share capital:
Increased earnings every year through dividend on shares.
Increased wealth as a Kimisitu Shareholder.
Increased share capital builds on the capital structure of the Sacco hence providing more sustainability and guaranteeing members services now and in the future.
Increase your share capital now by sending your contributions through our various modes of payment including MPESA, bank transfer, Cheque. Send your banking slip through finance@kimisitusacco.or.ke and clearly indicate “Payment for Share capital”

Let’s grow our wealth as we continue to “partner to prosperity”
Kind regards,

I have never joined a sacco, could someone enlighten me? 1.Where do Saccos get the money to pay interest on shares at 12%+ of they lend out the same money at a rate of 12%(Infact less than that since its 1% pm on a reducing balance)
THEY GET FUNDING BY POOLING TOGETHER MEMBER SAVINGS AND SUBSCIPTION FEE.THE MONEY IS AT ZERO INTEREST HENCE ABLE TO CHARGE 1%.HOWEVER THIS MODEL IS OUTDATED AND SACCOS HAVE BECOME INNOVATIVE.ONLY NORMAL DEVELPONENT LOANS ARE AT 1%.
2. How do they finance their operations if a sacco can pay interest of 40% on share capital and 12% on deposits yet lend at 1% per month on reducing balance

THEY RELY ON THE INNOVATIVE PRODUCTS THEY HAVE DEVEPOED.EG SALARY ADVANCE AT 10%,BIASHARA PLUS AT 2% ETC.THEY ALSO INVEST EXCESS CASH IN INCOME EARNING VENTURES.
3. If everyone paid of their loans, would all the members get their deposits and share capital ama saccos are pryamid schemes with strong fundamentals i.e endless contributions of members

YES THEY WOULD ALL GET BUT WITH OUR CROOKED MANAGERS THIS MAY NOT HAPPEN.