WANA-ANGA SACCO SOCIETY BACK OFFICE LOAN POLICY
You can Download the Loan application form here
1.0 INTRODUCTION
The loan policy for Savings and Credit Co-operative Societies (commonly referred to as SACCO societies) was last reviewed in 1992 under the Commissioner’s circular letter No. MCD/ORG/7/VOL11/55 of 6th August 1992. Since then, a lot of development (i.e. liberalization has taken place within the SACCO societies thereby necessitating the revision of the policy guidelines.
The revised loan policy as a whole is designed to conform with and supplement the By-laws of Wana-Anga SACCO society with a view to:-
a) Ensure that Wana-Anga gives loan in an efficient manner
b) Facilitate loan processing and improve loan recoveries so as to achieve wana-anga objectives.
1.1 TYPES OF LOANS
a) Normal/development loan
This is a development loan which is repayable for a period approved by the AGM. The current duration for this loan is 48 months. A waiting period of 2 months is mandatory from the time of first approval to the final approval.
b) Refinancing Loan
This is a loan given when a member has an existing Normal loan and when the said Normal is not enough to complete the intended project. The loan is payable within 36 months.
c) NEW Instant Loan
This is a special type of Normal loan that is granted within 48 hours and attracts a commission payable at the time of loan disbursement. The loan is payable within 48 months. The Interest Rate is 14.2% Per Annum on a straight-line basis. The Loan is given up to a maximum of 4 times the Deposit.
d) School Fees loan
This is a loan given to a member for the purpose of paying school fees. The loan is payable within 12 months. For a member to be granted the loan, the school fees structure must be attached to the application form. The approved amount is paid directly to the school account where applicable. The interest is on a reducing balance.
e) College Fees loan
This is a loan given to a member for the purpose of paying college fees. The loan is payable within 24 months. For a member to be granted the loan, the college fee structure must be attached to the application form. The interest is on a straight-line basis.
f) Emergency Loan
This is a loan granted to a member when faced with unforeseen circumstances beyond his/her control. This includes emergency hospitalization, funeral expenses, court fines etc. It is payable within 12 months and the interest is on a reducing balance. For a member to be granted this loan, a proof of the emergency should be attached to the application form.
2.0 LOAN ELIGIBILITY
2.1 BOSA
A member of Wana-Anga SACCO Society may be eligible for a Bosa loan only if the member:-
a) Has contributed the minimum Shares/Deposits contribution for at least six months continuously.
b) Has not defaulted on loans repayments.
c) Is upto date in share contribution.
d) Has cleared any outstanding loan of the same type applied for.
e) Has rested for a specified period for a particular loan applied for.
f) The loan is fully guaranteed.
3.0 LOAN APPLICATION
All loans applications shall:-
a) Be made on prescribed forms set by the Wana-Anga society.
b) Set out the amount applied for.
c) Set the purpose for the loan.
d) Set the terms of repayment. (weekly, monthly, etc)
e) Set the terms of security provided
f) Be made on the fully completed form and supported by two pay-slips or relevant supporting documents showing the ability to repay the loan.
g) Set the period of repayment.
4.0 LOAN APPROVAL
All normal loans shall be approved by the credit committee and be presented to Board Management for final approval. Other back office loans such as Normal Instant, emergency and school fees are approved by the credit committee.
4.1 NORMAL/INSTANT NORMAL LOANS:
a) In addition to satisfying the above conditions, loan applications shall be considered in the order in which they are received.
b) The Annual General Meeting shall set the maximum number of times the shares will be multiplied to determine the maximum amount.
c) No member will be given a loan without the ability to pay.
d) All members shall be required to rest for the stipulated time after finishing one normal loan before applying for another.
e) Members who have defaulted on loans or share contributions shall not be granted any loan.
f) Members who boost their shares shall be required to rest for stipulated time before taking a loan against those shares.
g) Where a member is employed on contract, he/she may be granted a loan payable within his/her contractual period.
4.2 SCHOOL FEES LOAN
In addition to satisfying the above conditions:-
a) School fees loan shall be payable within 12 months and shall be granted to a member only after clearing any outstanding school fees loan.
b) School fees loan shall be granted on production of genuine support documents.
c) School fees cheques shall be sent directly to the school where applicable and necessary.
4.3 EMERGENCY LOAN
In addition to satisfying the above conditions:-
a) Emergency loan will be payable within 12 months and will be granted to a member only after clearing any outstanding emergency loan.
b) Emergency loan shall be granted on production of genuine supporting documents and cheques shall be written to the institution concerned where applicable and necessary.
4.4 REFINANCING LOAN
This loan shall be given the least priority. However genuine cases will be considered on production of supporting documents.
5.0 LOAN POLICY
All loans shall be granted in accordance with the Loaning Policy and procedures to ensure that members efficiently get their loans and to facilitate and improve loan recoveries to assist members. The loaning policy is subject to review by the AGM from time to time.
a) WANAANGA SACCO may grant loans to members in the register.
b) The repayment period, borrowing power, and rate of interest on loans shall be proposed by the board of management of the society and approved by the AGM.
c) No loan shall be granted to a member who cannot pay by the ACT and these by-laws.
d) All loans shall be applied for on prescribed forms.
e) The loan application shall be signed by the member and in each shall set forth the amount applied for, the repayment the security, if any and such other information as the credit/front committee or loans officer may require. All applications for loans and the report of the credit/front committee or loans officer thereof shall be filled as a permanent record of the society.
f) Loan applications shall be considered by the credit/front committee in the order in which the applications are made unless the loan is deemed by the committee to be an emergency loan.
g) The credit/front/board of management may summon or cause an applicant to be summoned to appear personally to be interviewed in respect of his/ her application for a loan, to determine the members’ ability to repay the loan.
h) The loan application form shall clearly state the amount of the loan, the rate of interest, the terms of repayment, and the security if any.
i) All loans shall be approved by the credit/front committee and ratified by the board of management
j) For members being considered for a loan, his shares, savings, deposits, and any security approved by the board of management may be taken into account.
k) The board of management may draw further regulations in respect to granting of loans provided such a regulation shall not come into force until approved by a general meeting.
l) No loan or credit facility shall be granted to a member where the loan or credit facility, in the aggregate, exceeds such a limit of the society’s core capital.
m) All loans granted must be subjected to an insurance fee as may be determined by the Board.
5.1 SECURITY FOR LOANS
- The board of management shall ask for such security for loans, as it may deem necessary. The shares guarantee and deposits of a member may be taken as security.
- Where there is, after 90 days, continued delinquency, the board may offset the loan balance, from the shares, guarantees, deposits, and savings.
- The committee may refuse to accept as a guarantor a person who is himself/herself in receipt of a loan or who has over-guaranteed and may decline to grant a loan subsequently to a member while he/she remains liable as a guarantor.
- No director, officer, employee, or member of the board of the society shall act as a guarantor of any person concerning a loan advanced or credit facility granted to a person by the society.
- A borrower or guarantor may apply to the credit/board of management for a change of guarantors.
5.2 REPAYMENT OF LOANS
- A borrower may, on any day on which the society is open for business, repay his loan in whole or in part before maturity.
- The board of management may in the most exceptional circumstances agree to the refinancing of a loan balance or any request for an extension of time in which to pay. Any extension so granted shall be treated as though it was a new loan and an extension agreement shall be executed.
- For any delinquent loan, the board of management shall attach the guarantee(s). The amount in default shall be recovered from the guarantor’s salary, deposits, savings, terminal savings, terminal benefits, and any other securities.
- If the employer will not have remitted the deductions within the first 7 days of every month the board of management shall refer the matter to the commissioner.
Any loan more than four months overdue may be referred to the Co-operative Tribunal as a dispute.
5.3 LOAN DEFAULTING
A member shall be considered a loan defaulter if his/her regular repayment has ceased.
- The society shall inform the defaulter in writing with a copy to the parties involved.
- The society shall attach the salary, terminal benefits and any other security for the loanee and the guarantor where applicable and necessary.
- Any member or an employee of the society who tampers with his/her monthly shares contribution and loan repayments is liable to a disciplinary action to be determined by the Board.
- In case of any default in payment, the entire loan balance will immediately become due and payable at the discretion of the society.
- All shares and deposits owned by the member plus any interest and deposits due to the member will be set against the owed amount.
- The member will be liable for any costs incurred in the collection of the loan balance and accumulated interest. Any remaining balance will be deducted from guarantors or terminal benefits where applicable.
WANA-ANGA SACCO SOCIETY BACK OFFICE LOAN POLICY
You can Download the Loan application form here
1.0 INTRODUCTION
The loan policy for Savings and Credit Co-operative Societies (commonly referred to as SACCO societies) was last reviewed in 1992 under the Commissioner’s circular letter No. MCD/ORG/7/VOL11/55 of 6th August 1992. Since then, a lot of development (i.e. liberalization has taken place within the SACCO societies thereby necessitating the revision of the policy guidelines.
The revised loan policy as a whole is designed to conform with and supplement the By-laws of Wana-Anga SACCO society with a view to:-
a) Ensure that Wana-Anga gives loan in an efficient manner
b) Facilitate loan processing and improve loan recoveries so as to achieve wana-anga objectives.
1.1 TYPES OF LOANS
a) Normal/development loan
This is a development loan which is repayable for a period approved by the AGM. The current duration for this loan is 48 months. A waiting period of 2 months is mandatory from the time of first approval to the final approval.
b) Refinancing Loan
This is a loan given when a member has an existing Normal loan and when the said Normal is not enough to complete the intended project. The loan is payable within 36 months.
c) NEW Instant Loan
This is a special type of Normal loan that is granted within 48 hours and attracts a commission payable at the time of loan disbursement. The loan is payable within 48 months. The Interest Rate is 14.2% Per Annum on a straight-line basis. The Loan is given up to a maximum of 4 times the Deposit.
d) School Fees loan
This is a loan given to a member for the purpose of paying school fees. The loan is payable within 12 months. For a member to be granted the loan, the school fees structure must be attached to the application form. The approved amount is paid directly to the school account where applicable. The interest is on a reducing balance.
e) College Fees loan
This is a loan given to a member for the purpose of paying college fees. The loan is payable within 24 months. For a member to be granted the loan, the college fee structure must be attached to the application form. The interest is on a straight-line basis.
f) Emergency Loan
This is a loan granted to a member when faced with unforeseen circumstances beyond his/her control. This includes emergency hospitalization, funeral expenses, court fines etc. It is payable within 12 months and the interest is on a reducing balance. For a member to be granted this loan, a proof of the emergency should be attached to the application form.
2.0 LOAN ELIGIBILITY
2.1 BOSA
A member of Wana-Anga SACCO Society may be eligible for a Bosa loan only if the member:-
a) Has contributed the minimum Shares/Deposits contribution for at least six months continuously.
b) Has not defaulted on loans repayments.
c) Is upto date in share contribution.
d) Has cleared any outstanding loan of the same type applied for.
e) Has rested for a specified period for a particular loan applied for.
f) The loan is fully guaranteed.
3.0 LOAN APPLICATION
All loans applications shall:-
a) Be made on prescribed forms set by the Wana-Anga society.
b) Set out the amount applied for.
c) Set the purpose for the loan.
d) Set the terms of repayment. (weekly, monthly, etc)
e) Set the terms of security provided
f) Be made on the fully completed form and supported by two pay-slips or relevant supporting documents showing the ability to repay the loan.
g) Set the period of repayment.
4.0 LOAN APPROVAL
All normal loans shall be approved by the credit committee and be presented to Board Management for final approval. Other back office loans such as Normal Instant, emergency and school fees are approved by the credit committee.
4.1 NORMAL/INSTANT NORMAL LOANS:
a) In addition to satisfying the above conditions, loan applications shall be considered in the order in which they are received.
b) The Annual General Meeting shall set the maximum number of times the shares will be multiplied to determine the maximum amount.
c) No member will be given a loan without the ability to pay.
d) All members shall be required to rest for the stipulated time after finishing one normal loan before applying for another.
e) Members who have defaulted on loans or share contributions shall not be granted any loan.
f) Members who boost their shares shall be required to rest for stipulated time before taking a loan against those shares.
g) Where a member is employed on contract, he/she may be granted a loan payable within his/her contractual period.
4.2 SCHOOL FEES LOAN
In addition to satisfying the above conditions:-
a) School fees loan shall be payable within 12 months and shall be granted to a member only after clearing any outstanding school fees loan.
b) School fees loan shall be granted on production of genuine support documents.
c) School fees cheques shall be sent directly to the school where applicable and necessary.
4.3 EMERGENCY LOAN
In addition to satisfying the above conditions:-
a) Emergency loan will be payable within 12 months and will be granted to a member only after clearing any outstanding emergency loan.
b) Emergency loan shall be granted on production of genuine supporting documents and cheques shall be written to the institution concerned where applicable and necessary.
4.4 REFINANCING LOAN
This loan shall be given the least priority. However genuine cases will be considered on production of supporting documents.
5.0 LOAN POLICY
All loans shall be granted in accordance with the Loaning Policy and procedures to ensure that members efficiently get their loans and to facilitate and improve loan recoveries to assist members. The loaning policy is subject to review by the AGM from time to time.
a) WANAANGA SACCO may grant loans to members in the register.
b) The repayment period, borrowing power, and rate of interest on loans shall be proposed by the board of management of the society and approved by the AGM.
c) No loan shall be granted to a member who cannot pay by the ACT and these by-laws.
d) All loans shall be applied for on prescribed forms.
e) The loan application shall be signed by the member and in each shall set forth the amount applied for, the repayment the security, if any and such other information as the credit/front committee or loans officer may require. All applications for loans and the report of the credit/front committee or loans officer thereof shall be filled as a permanent record of the society.
f) Loan applications shall be considered by the credit/front committee in the order in which the applications are made unless the loan is deemed by the committee to be an emergency loan.
g) The credit/front/board of management may summon or cause an applicant to be summoned to appear personally to be interviewed in respect of his/ her application for a loan, to determine the members’ ability to repay the loan.
h) The loan application form shall clearly state the amount of the loan, the rate of interest, the terms of repayment, and the security if any.
i) All loans shall be approved by the credit/front committee and ratified by the board of management
j) For members being considered for a loan, his shares, savings, deposits, and any security approved by the board of management may be taken into account.
k) The board of management may draw further regulations in respect to granting of loans provided such a regulation shall not come into force until approved by a general meeting.
l) No loan or credit facility shall be granted to a member where the loan or credit facility, in the aggregate, exceeds such a limit of the society’s core capital.
m) All loans granted must be subjected to an insurance fee as may be determined by the Board.
5.1 SECURITY FOR LOANS
5.2 REPAYMENT OF LOANS
Any loan more than four months overdue may be referred to the Co-operative Tribunal as a dispute.
5.3 LOAN DEFAULTING
A member shall be considered a loan defaulter if his/her regular repayment has ceased.