1. SAVINGS PRODUCTS
(a) SHARE CAPITAL
• This is the members/shareholders contribution towards Sacco capital and forms the saccos equity.
• Contribution per member: Minimum of 500 shares at KES 20 each (KES 10,000)
• Earns dividends annually.
• Shares are transferable to other members upon exit but not refundable.
(b) MEMBERS DEPOSITS
• Minimum monthly deposit of kshs. 1,000
• Entitles member to loans of up to 3 times of their deposits except for the Nyumba & Shamba loan which is based on 4 times of their deposit.
• Earns interest annually.
• Deposits are reimbursed upon exit.
2. LOAN PRODUCTS
(a) NORMAL/DEVELOPMENT LOAN
• Maximum Amount - 3 times member’s deposits.
• Repayment period - 60 Months.
• Interest charged is 1% p.m. or 12% p.a on a reducing balance.
• Loans security accepted: guarantors & Title Deed.
(b) SHAMBA LOAN
• The loan amount is 4 times the member deposit.
• The repayment period is 96 months.
• Minimum amount of saving is Kshs One million (1,000,000)
• Interest charged is 1% p.m. or 12% p.a on a reducing balance.
• The applicant must surrender the title for charging.
• The property title is the collateral for the loan.
• Members take care of the legal costs.
(c) NYUMBA LOAN
• The loan amount is 4 times the member deposit.
• The loan amount is 4 times members deposits and shares.
• The repayment period is 96 months.
• Minimum amount of savings is Kshs One million (1,000,000).
• Interest charged is 1% p.m. or 12% p.a on a reducing balance.
• The applicant must surrender the title.
• The land where the house is to be built is the collateral.
• The members take care of the legal costs.
(d) CAR LOAN
• The loan amount is 3 times the member’s deposit and shares.
• The repayment period is 60 months.
• The amount MUST not exceed 60% of the value of the vehicle.
• The vehicle must not have been used locally.
• Interest charged is 1% p.m. or 12% p.a on a reducing balance.
• The car is the collateral in case of buying.
• The applicant must surrender the log book.
• The vehicle must have a comprehensive insurance cover.
• The members take care of the legal costs.
(e) SCHOOL FEES LOAN
• Maximum Amount should not exceed 50% of member’s deposits, this may be subject to review by the board.
• The repayment period is 12 months.
• Interest charged is 1% p.m. or 12% p.a on a reducing balance.
• The society reserves the right to grant or deny a loan despite the formula based on eligibility.
• Applicants must attach documentary evidence such as fees structure, proforma invoice or demand notes from institution of learning.
(f) EMERGENCY LOAN
• Maximum Amount should not exceed 50% of member’s deposits, this may be subject to review by the board.
• The repayment period is 12 months.
• Interest charged is 1% p.m. or 12% p.a on a reducing balance.
• The society reserves the right to grant or deny a loan despite the formula based on eligibility.
(g) SNAP LOAN
• Who qualify – A member who was qualified for dividend in the calendar year.
• Maximum amount should not exceed dividend earned in the Calendar year.
• He/she must be up to date with his/her monthly savings.
• The loan shall accrue 3 % interest per month at a fixed rate.
• Terms of repayment are 3 equal instalments with a penalty of Kes 10% p.m. for every instalment overdue.
• Default will lead to deduction from your Shares immediately and the same to be reimbursed to you through your dividend account.
(h) TOP-UP/REFINANCE LOAN
• The loan applies to development loans only.
• Interest charged is 1% p.m. or 12% p.a on a reducing balance.
• The loan must have been repaid for at least 3 months and an up-to-date repayment for those 3 months.
• The repayment period shall be within the term of the old loan.
(i) RESTRUCTURED LOAN
• A restructured loan refers to an existing loan facility whose repayment terms have been modified by the SACCO, at the request of the member, due to demonstrated financial challenges or other valid circumstances.
• A formal written application must be submitted by the member.
• The loan term shall be as the SACCO policies.
• Approval shall be subject to review by the Credit Committee/Loans Committee.
• Interest rates applicable on the restructured loan shall remain subject to the prevailing SACCO lending rates unless otherwise determined by the Board.
• A loan may only be restructured once during its lifetime unless otherwise approved by the Board under exceptional circumstances.
• The SACCO reserves the right to decline a restructuring request if it is deemed to expose the society to undue financial risk.
PROCEDURES FOR LOAN APPLICATIONS:
• All loans applications shall be completed in writing on standard forms provided by the society and fully filled by the applicants. Verbal applications shall not be entertained.
• The loan application form shall in each case set the amount applied for, the purpose of the loan, terms of repayment and guarantees offered.
• The loan application form must be fully completed and supported by relevant supporting documents (such as pay slip, Bank statement, commitment from the employer for terminal benefits) confirming the applicant’s ability to repay loan comfortably.
LENDING CONDITIONS:
• A member must have been in the SACCO for at least six (6) months.
• The Total loan deductions shall not exceed two-thirds basic pay and fixed allowances.
• All applications shall be scrutinized by the Credit Committee for approval and then by the Board.
• The Loan must be fully guaranteed.
• The loan should not exceed 3 times members’ deposits and 4 times for Nyumba and Shamba loan.
• All loans shall be granted for the purposes applied for.
• A member may be granted a loan without guarantor(s) if it does not exceed 90% of his/her deposits and has not guaranteed any loan.
NOTE:
• Valuation is done by the Sacco approved valuers.
• The charging documents are prepared by the Sacco approved advocate.
• Funds will be released as lumpsum to the seller after the charged Title is presented to the Sacco office for safe custody.
