1. LENDING REQUIREMENTS

For a member to qualify for any credit facility from the Society, she/he must meet the following requirements:-
  • A member must have completed at least six (6) months membership.
  • A member is required to maintain monthly deposit contribution of not less than Kshs 6000 provided that he/she should not own more than 5% of the assets of the Sacco
  • Members will therefore qualify for loans at the rate of THREE (3) times total deposits contributions after continuously contributing for six (6) months
  • A member who withdraws from the Society and rejoins later will be subjected to clause (a) and (b) above, for the purpose of the loan policy.
  • Lump sum deposit savings contribution for the purpose of obtaining a loan facility from the Society shall remain in the Society for at least six (6) months to qualify for a loan.
  • Any member who clears his/her development loan through bulk loan repayment must wait for at least three (3) months before qualifying for another loan under the same category.
  • A member is entitled to a maximum limit of loan(s) equivalent to three (3) times the value of deposits held subject to availability of funds.
  • Any member applying for a loan must maintain a deposit equivalent to 10% of the loan applied for minimum Ksh 6,000.
  • A member who withdraws from the Society and rejoins later will be treated as a new member for the purpose of the loaning policy
  • No member shall belong to more than one Co-operative Savings and Credit Society at the same time. Where a member leaves the common bond by virtue of transfer or retirement he/she may continue to be a member of this Society or may transfer all his/her shares to the society to which he/she intends to join under the new employer.
  • All new applicants for Membership must provide written proof from their previous employer and the Board of the previous society that they do not have outstanding liability in the society and they are no longer members of the same society.
  • A member who joins the society and instructs his/her former society to transfer his/her shares to this Society, on receipt of such shares, the said member shall be exempted from the mandatory six (6) months as applies to the new applicant as stipulated in the By-Law No.3© above. In all cases a member must clear any outstanding loans with society of his or her old employer first. The society of his/her employer shall transfer the shares direct to the Society of his/her new employer if the member so advices.
  • No member will be allowed to withdraw part of his/her shares or offset part of the shares against an outstanding loan unless he/she ceases to be a member.
  • The Society shall maintain 10% cash reserve of the total members’ savings. At least 50% of the cash reserve shall be kept in a deposit account and will not be available for granting loans. Such reserve shall be updated monthly to improve the Society’s cash flow.

    • 2. LOAN ELIGIBILITY CALCULATIONS

    Subject to availability of funds:-
  • Loans eligibility shall be based on members salary and no member should be allowed to suffer total deductions (including savings, loan repayment and interest) in excess of two thirds (2/3) of his or her monthly gross salary nothing in the foregoing need prevent any member from repaying his or her loan and interest in whole or in part, prior to its maturity.
  • The maximum amount of loans granted to each member shall not exceed 3 times a member’s
  • Where total deductions exceed two thirds (2/3) of a member’s gross salary the loan shall be reduced accordingly.
  • Gross salary includes house allowance. Owner occupier house allowance will be considered only on production of written advice by the employer and to the extent that the allowance is in excess of monthly mortgage installment, if any. e) Under no circumstances should other sources be taken into account in determining a member’s ability to repay the loan as at the time of loan granting.
  • No loan shall be made to any member in excess of 5% of the Society’s Share Capital and Reserves nor for a period exceeding 60 months.

    • 3. LOAN REPAYMENT

  • A member is free to repay the loan from any other source besides the individual salary.
  • Loans granted does not have grace period as it applies to other financial institutions, hence deductions for loan repayment shall commence not later than the month following that which the loan was paid to the member.
  • Repayment period shall not exceed the period determined by the Management committee but in all cases shall not exceed 60 months.
  • Repayment terms shall clearly show separately, amounts relating to the principle loan repayment and interest.

    • 4. PRODUCTS AND SERVICES

    A. DEVELOPMENT LOAN (NORMAL LOAN)

    This is a loan ranted mainly for the purpose of long term development. The loan is granted subject to the following conditions:-
  • Repayment is spread over a period of forty eight (48) months
  • Interest charged is minimal one percent (1%) per month on a reducing balance
  • While computing eligibility, the total amount granted of all outstanding loans MUST never exceed THREE TIMES of members shares contributed.
  • Members who complete repaying their development loans should wait for three months before submitting their application forms for a fresh development loan

    • B. EDUCATION LOANS

    This is a facility that has been provided to assist members in their severe financial encounter in school fees payment in both local and overseas educational institutions, without being inconvenienced. The loan is tailored to cover fees for schools, colleges, universities and other tertiary training.

    With this facility a member is able to meet the cost of advanced education. Long repayment periods allow members to carry on with other projects at the same time. Proper planning by a member will enable easy repayment without straining.

    Conditions attached are as follows:-
  • The school fees loan is advanced at 100% of the annual fees as per the fees structure.
  • Repayment is within twelve (12) months at the existing rate charged by the society on other loans
  • Outstanding school fees must be cleared before a new one is granted
  • Loans under the scheme will require guarantors just as under development loans
  • Money is mainly paid direct to the respective educational institutions upon provision of the relevant documents, including the most recent pay slip

    • C. EMERGENCY LOANS

    These are loans provided to cover emergency situations such as accidents, hospital bills, court fines, and any other unforeseen circumstances beyond the member’s control.

    Conditions attached are as follows:-
  • Granted within reasonable time on providing the relevant documents subject to availability of funds
  • Repayment within twelve (12) months at an interest rate of one percent (1%) per month on reducing balance
  • A member, subject to qualification, is entitled to an emergency loan at any given period
  • Total loans including this emergency loan shall not exceed THREE (3)times the member’s deposits

    • D. INSTANT LOAN (SAWA QUICK CASH SERVICE)-SQCS

    This is a credit facility granted to serve members’ most immediate emergency needs. A member can apply for up to Kshs 10,000.00 subject to review by the management committee.

    BENEFITS
  • Granted within reasonable time on providing the relevant documents subject to availability of funds
  • Repayment within twelve (12) months at an interest rate of one percent (1%) per month on reducing balance
  • A member, subject to qualification, is entitled to an emergency loan at any given period
  • Total loans including this emergency loan shall not exceed THREE (3)times the member’s deposits

    • E. CHRISTMAS/HOLIDAY SAVINGS SCHEME

    Christmas/holiday special saving facility is offered by the Society to its members who have voluntarily joined the scheme with the sole purpose of saving for Christmas/special holidays. The scheme operates based on the following grounds:

  • Membership is voluntary
  • minimum amount of savings per month is Kshs 1000.00
  • duration is eleven (11) months from January to November
  • Withdrawal/refunds are only made in June and December.
  • Those who save up to November benefit from a small amount of interest on the savings, which is determined by the Society’s Management Committee.

    • F. SPECIAL PROJECTS

    These are special products which are offered to members in order to acquire household equipment and building materials within shorter periods than thirty-six (36) months. These include
    i. HOUSEHOLD AND DOMESTIC EQUIPMENT
    This facility is offered by the Society to its members who wish to buy household, electronic equipment, building materials, Plots, etc

    The term of the loan is 6 months The Maximum amount which a member can borrow is set by the Credit committee subject to availability of funds.
    ii. LAND
    This special loan facility is offered by the Society to its members in order to acquire plots for building commercial or residential properties

    The following conditions apply:-
  • Repayable within thirty six (36) months at 1% interest rate per month on reducing balance (If finances are outsourced, the interest rate may vary)
  • Loans under this facility will require guarantors as applied to the development loans
  • Qualification is subject to terms prescribed by the Management Committee
  • Only those members who qualify shall be granted the loans
  • Members who qualify will ballot to get the plot allocations

    • 5. GUARANTEE OF SOCIETY LOANS

  • All loans applied for must be fully secured by the guarantors.
  • Members of the Management and Supervisory Committees shall not guarantee among themselves or other Sacco memebrs
  • The obligation of the previous guarantors shall cease upon the change of guarantors, subject to new guarantors being accepted by the Society. The obligation of the guarantors shall also cease when a new loan when loans guaranteed have been reduced to or less than the member’s shares.
  • The Society shall maintain a record of all guarantors to every loan in each member’s personal file and also shall open and maintain guarantors’ register.
  • A member’s deposits pledged as security for another member’s loan shall not be surrendered to offset his/her outstanding loan, unless the former can provide an alternative security for the latter’s loan.

    • 6. OFFENCES UNDER THE POLICY

  • It shall be an offence for an applicant, Society employees to give false information regarding shares, loans, guarantees, among others, which is likely to mislead the approving committee.