| 1. |
LOAN ELIGIBILITY
A member shall be eligible for a loan if he/she: -
| (a) |
Has had a continuous payroll deduction contribution for a minimum period of three (3) months. |
| (b) |
Has a minimum of K200.00 in his/her general savings account (S1 account). |
| (c) |
Is honest & of good character and has had no prior conviction for fraud or theft |
| (d) |
Has good credit ratings |
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| 2. |
LOAN APPLICATION FORMS
| (a) |
All requests for loans shall be lodged in the form of the Society’s loan agreement. |
| (b) |
The Society’s loan agreement must be completed in full. |
| (c) |
A copy of the last 3 fortnights pay slips must be attached. |
| (d) |
All necessary documents to support the application must be attached. |
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| 3. |
PURPOSE, RATIOS AND TERMS OF LOAN
The Society shall initially grant loans but not necessarily limited to the following purposes -
| Code |
Purpose |
Ratio |
Term |
| 1. |
Education Expenses |
1:2 |
3 years |
| 2. |
Medical Expenses |
1:2 |
3 years |
| 3. |
Funeral Expenses |
1:2 |
3 years |
| 4. |
Bride Price/ Wedding commitments |
1:1 |
2 years |
| 5. |
Household Electrical items & chattels |
1:1 |
2 years |
| 6. |
Holiday / Travel expenses |
1:1 |
2 years |
| 7. |
Motor Vehicle Purchase |
1:1 |
2 years |
| 8. |
Motor Vehicle Registration & Insurance |
1:1 |
2 years |
| 9. |
Motor Vehicle Repair |
1:1 |
2 years |
| 10. |
Outboard Motor & Dinghy Repair |
1:1 |
2 years |
| 11. |
Birthday Expenses |
1:1 |
2 years |
| 12. |
Investments |
1:1 |
2 years |
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| 4. |
MAXIMUM LOAN
| (a) |
The maximum loan the Society may grant to a member shall not exceed his / her total accumulated savings at any one time taking into account any existing loans, fees and charges that is outstanding to the members account. The maximum amount is limited to K20,000.00. |
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| 5. |
MINIMUM LOAN
The minimum loan that may be granted to a member at any one time shall be K200.00. |
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| 6. |
MINIMUM SAVINGS CONTRIBUTION
The minimum savings contribution per fortnight for each member is K20.00. |
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| 7. |
ADDITIONAL LOANS
Additional Loans May Be Granted to a member:-
| (a) |
Subject to Section 5, 6, 7 and 8 of this policy. |
| (b) |
If a members' current savings fully secures the aggregate sum of the loan required, and any existing loan balance outstanding on the ratio 1:1. |
| (c) |
No member shall be granted more than one (1) additional loan per month. |
| (d) |
No additional loans will be granted to any member whose existing loan balance exceeds their aggregate savings balance. |
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| 8. |
CHANGE OF LOAN PAYEE CHEQUE
| (a) |
Any loan cheques returned for the purpose of altering the loan payee, shall be immediately cancelled, and the member's account credited for the corresponding amount. |
| (b) |
The member may submit a fresh loan application. |
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| 9. |
FUNDING OF LOANS
| (a) |
All loan cheques for fully secured loans may be made payable to members concerned. |
| (b) |
A fully secured loan means loans that are equal or less than members savings balance. |
| (c) |
Loans may be funded on a progressive basis. New Loans will be prioritized over additional loans. |
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| 10. |
LOAN REPAYMENTS
| (a) |
All loans are repayable within 24 months or less. |
| (b) |
All loan repayments and terms must strictly adhere to the loan repayment schedule attached. |
| (c) |
Any interest rate in excess of 1% per month on the unpaid balance may be charged subject to the approval of the Registrar. |
| (d) |
Not withstanding Subsection (c) and (d), a minimum amount of interest of K2.00 per month may be charged. |
| (e) |
Interest may be calculated to the nearest whole month during which a portion of the loan remains unpaid. |
| (f) |
Any interest charged on the loan under Subsection (c) and (d), not repaid for six months after the last date of repayment, cease to accumulate any additional interest in the member's loan account but shall continue to be charged to the interest suspense account. |
| (g) |
A borrower may repay his loan in whole or in part on any day on which the office of the society is open for business. |
| (h) |
Subject to Subsection (j), all monies due to a society by a member, not being repaid for 18 months after the last date of repayment, shall be provided as bad debt of the member. |
| (i) |
The society shall continue to recover from a member moneys referred to in Subsection (i). |
| (j) |
Repayment schedule must include principal plus interest. |
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| 11. |
DEFERRED LOANS
| (a) |
Loan applications may be deferred pending the following reasons: -
| (i) |
The member needs to increase contributions to meet the terms of the loan. |
| (ii) |
The loan application is incomplete. |
| (iii) |
Three latest pay slips are not attached. |
| (iv) |
Quotations for the total amount applied for are required. |
| (v) |
Documentary evidence from appropriate authority is required. |
| (vi) |
An interview with the member is needed to gather more information. |
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| (b) |
Deferred loan applications may be re-submitted for a decision after fulfillment of conditions as outlined in Section 11(a) above. |
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| 12. |
LOAN APPLICATIONS NOT APPROVED
Loan applications shall not be approved for the following or more reasons: -
| (i) |
The member is terminated from employment. |
| (ii) |
The loan sought exceeds his savings balance. |
| (iii) |
The loan application is not consistent with this policy. |
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| 13. |
LOANS TO MEMBERS ON LEAVE
| (a) |
Loans may be granted to members who are on leave on the following conditions: -
| (i) |
The applicant shall pay in advance, the determined loan repayments for the duration of leave in absence of payroll deductions. |
| (ii) |
Failing the above, the loan application shall be denied. |
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| 14. |
CASH DEPOSITS
| (a) |
Cash deposits shall be accepted as share saving contributions or as a loan repayment. |
| (b) |
Loans requested immediately after making cash deposits shall be considered on a share savings to loan balances ratio of 1:1 and subject to Section 7 (c). Exceptions are loans for school fees which can be considered on a 1:2 basis. |
| (c) |
Additional loans requested immediately after making cash deposits shall be considered on a 1:1 share savings to loan balance ratio one month from the date of the last deposit. |
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| 15. |
LENDING PRIORITIES
| (a) |
The privilege to obtain loans shall be in this order of priority: -
| (i) |
Loan applications for amounts to be considered on a share savings to loan balances ratio 1:1 - except if applying for a school fee loan. |
| (ii) |
Time of submission. This means loan applications shall be considered on a first come first serve basis. |
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| 16. |
SECURITY
| (a) |
Additional security shall be taken out on any particular loan deemed necessary and/or directed in accordance with the Rules of the Society. |
| (b) |
The Society shall have a lien on all categories of member's savings, against loans that he/she may hold at any one time. |
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| 17. |
INTEREST ON LOANS
| (a) |
(a) The Society shall charge interest of 1% per calendar month on the unpaid balance on all existing and current loan accounts. |
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| 18. |
LOAN INTEREST REBATE
| (a) |
A member that pays out their loan prior to the completion of the term of loan shall earn an interest rebate. |
| (b) |
The rebate shall be in the form of any further loan interest that may be due on the loan for the full term of the loan, calculated from the date of loan payout. |
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| 19. |
STAMP DUTY
| (a) |
A Stamp Duty of K10.00 shall be charged on loan agreement for amounts ranging from K4, 000.00 to the maximum of K10, 000.00. Stamp Duty shall be charged at 0.1 % of the loan amount for any loan funded over K10, 000.00. |
| (b) |
The fee is compulsory charged by the Internal Revenue Commission. |
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| 20. |
MEMBERSHIP WITHDRAWAL
| (a) |
Member will not be allowed to withdraw until they have paid their loan in full. |
| (b) |
Withdrawing members will receive the balance of their savings and less outstanding loans. For deceased members, entitlements due will be paid to their next of kin or to the Public Curator's office. |
| (c) |
All requests for membership withdrawal shall be in written form. |
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| 21. |
SAVINGS TO OFF-SET LOANS
| (a) |
Savings may be transferred to offset loan accounts. |
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| 22. |
DELINQUENCIES
| (a) |
All loans delinquent for more than thirty (30) days shall be served 1st reminder notices. |
| (b) |
All loans delinquent for more than Sixty (60) days shall be served 2nd reminder notices. |
| (c) |
All loans delinquent for more than Ninety (90) days shall fall immediately due. A letter of demand will be issued to settle the account in full forthwith. |
| (d) |
After 7 days, legal proceedings to recover bad loans shall be immediately instituted against those borrowers who fail to respond to the letter of demand. |
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