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2016
HOMEPESA SACCO SOCIETY LIMITED
LOANING POLICY
This document shall be used as a guide for effective credit management for the society
2016
Homepesa SACCO Society Limited
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TABLE OF CONTENT
TABLE OF CONTENT ................................................................................................................... 2
Chapter 1 INTRODUCTION ......................................................................................................... 4
1.1 Background ............................................................................................................................. 4
1.2 Regulations.............................................................................................................................. 5
1.4 Availability of the Credit policy ..................................................................................................... 6
1.5 Confidentiality ............................................................................................................................... 6
Chapter 2 CREDIT POLICIES ........................................................................................................ 7
4.9.1 Definition............................................................................................................................. 7
4.9.2 Purpose of credit policy ...................................................................................................... 7
4.9.3 Guiding objectives of credit policy ...................................................................................... 7
4.9.4 Areas of lending .................................................................................................................. 7
Chapter 3 LOAN PRODUCTS ....................................................................................................... 8
4.9.5 Loan Types........................................................................................................................... 8
Chapter 4 CREDIT MANAGEMENT ............................................................................................. 9
4.2 Loan Application ..................................................................................................................... 9
4.3 Loan Appraisal ....................................................................................................................... 10
4.4 Loan approval/ Rejection ...................................................................................................... 10
4.5 Disbursement ........................................................................................................................ 11
4.6 Loan repayment .................................................................................................................... 11
4.7 Loan security ......................................................................................................................... 11
4.8 Collaterals…... ........................................................................................................................ 12
4.8.1 Types of Guarantees .............................................................................................................. 12
4.8.2 Guarantee Appraisal .............................................................................................................. 12
4.8.3 Other Aspects on Guarantees ................................................................................................ 13
4.9 Collateral Management ......................................................................................................... 15
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4.10 Insurance on Guarantees ....................................................................................................... 16
4.11 Reports .................................................................................................................................. 17
4.12 Default management ............................................................................................................ 18
6 Loss of a member ...................................................................................................................... 19
7 Loan loss provision and write offs ............................................................................................. 19
8 Credit committee ...................................................................................................................... 19
4.9.8 Credit committee meetings .............................................................................................. 20
4.9.9 Delegation ......................................................................................................................... 21
Chapter 5 SAVINGS................................................................................................................... 21
5.1 Savings mobilization .............................................................................................................. 21
5.2 Withdrawal of savings ........................................................................................................... 21
Chapter 6.0
ADOPTION .......................................................................................................................... 22
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Chapter 1 INTRODUCTION
1.1 Background
In Homepesa SACCO society is a SACCO that leverages on technology to offer value and
convenience to its members. The society shall endeavor to offer unique value proposition
to its customers by providing highly differentiated and personalized services based on
personal preferences, Income levels and spending habits.
The society shall seek to integrate its services with the core banking and other money
transfer applications to supplement other existing channels in order to give members
seamless experience of its products and services.
Loans constitute a major business activity and is expected generate a bigger percentage of
the society’s income and equally, taking up a large proportion of the management’s time.
There is a potential of an error or irregularity in this area which may expose the society
to a risk of losing its resources through the borrowers’ failure to repay the loans.
The implication of the above would be either the understatement of loans advanced to
members, wrong management accounts, loss of finance to the society and ultimately
accounts that may not give a true and fair view of the society’s loan balances at any one
given point.
This therefore, calls for thorough management of loans in order to ensure that the risk of
non-full repayment of loans is eliminated completely. This policy is therefore aimed at
addressing the above and serves as an informative tool for both members and officials of
the society.
Registration
To register with Homepesa Sacco, visit www.homepesasacco.com and click on the Sign Up button. Enter your details and click Sign Up. You can also sign up by downloading the Homepesasacco Android application on play store.
Your account will be created on our platform after registration. Proceed to make the payment for a non-refundable activation fee of Ksh 200 by using either Mpesa or debit/Credit card.
The activation fee will be used to verify your registration details using platforms such us the government's IPRS or other sources of data that are deemed fit for this requirement. Please note that when using debit cards, some banks such as Cooperative Bank of Kenya will require you to activate your card for online payments. Once you pay, your account will be reviewed and activated by our staff. Upload a soft copy of your national id/passport (both sides for ID) and passport size photo.
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To operate a withdrawable account, you do not require to pay the membership fee. This account will enable you to deposit and withdraw cash at will, buy airtime, transfer to savings and transfer cash to other members.
However to operate a savings account, you will be required to pay a non-refundable membership fee of Ksh 1,000. The savings account enables you to access loans that are three times your savings according to our loan policies.
Please note that the activation fee and membership fee are NON-REFUNDABLE. Your savings are refundable upon making a decision to deregister from the Sacco. Shares are only transferable to another member of the Sacco.
NOTE: Being a Sacco, members partly own the Sacco. You will purchase shares at will that will enable you get dividends at the end of every financial year based on the Sacco's profits. When making your first savings, minimum shares of Ksh 100 are deducted towards the shares.
Savings & Loans
To access an emergency/instant loan, your account must have been active for at least three months. To access development loans, your account needs to have been active for at least 6 months. Unsecured loans do not require a guarantor or security and must be less than or equal to your savings.
You will be able to access a secured loan that is three times your savings. You can secure your loan with either guarantors who are members of Homepesa Sacco and whose savings add up to the amount of loan that you need or have a security such as car log book or land title deed.
Please note that you can only guarantee someone a maximum of your savings less the amount already guaranteed. Your loan interest will depend on the payment period.
Deposits & Withdrawals
You can now operate a withdrawable account that allows you to deposit cash, withdraw cash, buy airtime, transfer to savings, transfer to other members among many other functions. In the near future you will also be able to pay bills such as electricity, water and many more.
1.2 Regulations
This credit policy is within the guiding laws and rules which are contained in the:
Co-operative Societies Act Cap 490 laws of Kenya.
Co-operative Societies Rules (2004)
Legal notices and commissioner’s circulars.
Homepesa SACCO Society By-laws
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1.4 Availability of the Credit policy
The policy or sections of the policy are not available for external distribution. It is freely
available to management, Credit Committee and members.
1.5 Confidentiality
The management committee shall take the utmost care in the security and safekeeping of
loan documents. All information provided by a member of the society must be kept in the
strictest confidence.
Chapter 2 CREDIT POLICIES
4.9.1 Definition
This policy is a guide to action and provides procedures and guidelines on how Homepesa
SACCO society should handle or manage its loans. The policy addresses the loan
processing and in particular member qualification, application, processing, approval,
disbursement, administration, collateral management, monitoring and delinquency
management.
4.9.2 Purpose of credit policy
The purpose of this policy is therefore to:
a) Be used as a guide when processing loans;
b) Document standard ways of loan administration and other credit programmes;
c) Eliminate misunderstanding and certain errors of omission which are likely to occur during the credit administration
4.9.3 Guiding objectives of credit policy
The society’s credit control objective is to ensure the proper functioning of the loans
management as follows:
a) Loans are given to bona fide members only;
b) Loans are properly appraised and approved;
c) Disbursement of loans is done as per approval terms and conditions;
d) Interest income is collected and recognized in the accounting period that it is
earned;
e) Proper records on loans are kept;
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f) There is effective monitoring and control;
g) Loans are well secured;
h) Adequate provisions are made for bad and doubtful debts;
i) No loan shall be granted for any illegal business or anti-social activities.
4.9.4 Areas of lending
Loans are only given for provident and productive activities that are geared
towards improving of life of our members eg.
a) Development;
b) Education;
c) Asset acquisition;
d) Securities purchase;
e) Emergencies;
f) Domestic consumables.
Chapter 3 LOAN PRODUCTS
3.1 General Lending Policies
a) A variety of loan products shall be offered that serve the needs of members and
are competitive in the market. From time to time new products shall be
developed after a research has been done and demand established.
b) A member shall be allowed to run only one loan product in each category at a
time, i.e., there will be no new loan before the existing loan is fully paid.
c) The total loan deductions for a member shall not exceed 2/3 of his/her gross
pay
The applicant must adhere to the waiting period set by the management committee from
time to time.
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4.9.5 Loan Types
Products Interest
rate (pm)
Repayme
nt period
(months)
Limit
Amount
(Kshs)
Qualifying
shares
Repayme
nt
method
Turnaro
und
time
Supporting
documents
Purpose
Development 1% 30 500,000 3X
Deposits
less Out.
Loan
Check off/
Direct
Debit
30days Nil Develop
ment
purposes
Super
Development
1.2% 48 1m 3X
Deposits
less Out.
Loan
Check off/
Direct
Debit
30days Nil Develop
ment
purposes
Emergency 1% 12 70,000 3X
Deposits
less Out.
Loan
Check off/
Direct
Debit
Weekly Proof must
be attached
Medical,
Death,
court
fine/
Bond,
Theft
Instant 4% 3 30,000 3X
Deposits
less Out.
Loan
Check off/
Direct
Debit
Weekly Nil Develop
ment
purposes
School fees 1% 12 150,000 3X
Deposits
less Out.
Loan
Check off/
Direct
Debit
30days School fees
invoice/
structure
School/
College
fees
Refinancing 6% of the
outstandi
ng loan
balance
Depende
nt on the
loan
product
Depend
ent on
the loan
product
3X
Deposits
less Out.
Loan
Check off/
Direct
Debit
30days Nil Develop
ment
purposes
4.9.6 Pricing of Loans
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Interest rates on all loans, fees and commission shall be determined by the management
committee and approved by the Annual General Meeting. Where the society has borrowed fund
from external sources for onwards lending to members, the rate of interest applied shall not be
less than 2% above the cost of borrowed funds.
Chapter 4 CREDIT MANAGEMENT
4.1 Requirement for qualification of loans
a) A member must have completed at least three months’ active membership.
b) The loan amount shall be based on a multiplier of the member’s savings in the Society
which shall be determined by the management committee from time to time and approved
by the AGM.
c) Any boosting of savings by a member shall only be considered for a loan after two months.
d) A member who withdraws from the society and rejoins later will be treated as a new
member for the purpose of this loan policy.
4.2 Loan Application
a) A member applying for a loan should undertake to pledge future salary, benefits and
terminal dues from the employer where applicable towards loan repayment before the
society grants such a loan.
b) All applications for loan shall be made on prescribed forms and shall in each case set out
the amount applied for, the purpose of the loan, terms of repayment and type of security
required. The loan application form must be fully completed, endorsed by the company and
supported by 2 recent pay slips where applicable.
c) False information on application form shall lead to automatic disqualification and shall
constitute an offence as per the Homepesa SACCO Society by-laws.
d) Loan applications shall be considered in order in which they are received. In event that
funds are inadequate for all the applications the management shall decide on the
preferred criteria to use.
4.3 Loan Appraisal
a) Once loan applications have been received at the society, they shall be recorded in an
applications register and keyed into the computer system.
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b) The credit sub-committee shall appraise the applicant to determine whether they qualify
for a loan or not and how much.
c) All loans shall be subject to the 2/3 rules i.e. all loan deductions including statutory
deductions shall exceed 67% of the applicants gross pay where applicable.
4.4 Loan approval/ Rejection
a) All loans shall be approved by the credit committee with exemptions being referred to
the management committee.
b) No member of the loan approving committee shall be present when his/ her loan is being
considered.
c) Loans shall be approved based on Character, Capacity, Capital, Conditions and
Collateral.
d) The credit committee shall approve loans based on a simple majority.
e) The repayment period shall be a maximum of the period dictated by the product
features but in all cases shall not exceed maximum ceiling at any given time.
f) Members will be informed immediately the decision has been passed on the fate of their
applications and reasons for passing such decisions.
g) If a member is not satisfied with the decision passed by the credit committee, such a
member will be free to submit a written appeal to the management committee within
fourteen days from the date a decision was passed by the credit committee.
h) When a loan is approved, the credit committee shall inform the member when the loan is
likely to be disbursed.
4.5 Disbursement
a) No new loan shall be disbursed before all existing similar loan types are paid off;
b) A loan shall be disbursed when all security documents have been completed, signed,
acknowledged and in place at the society’s registered office.
c) The society may use electronic funds transfer into the member’s bank account or cheques
as the mode of disbursement.
d) A loan may be released earlier than the stipulated waiting period upon payment of an early
release commission which would be determined by the management committee from time
to time.
4.6 Loan repayment
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a) Deductions for loan repayment shall commence not later than the month following that in
which the loan was paid to a member.
b) A member may repay his/ her loan and interest in whole or in part prior to its maturity.
c) No member should suffer total deductions (including savings, loan repayment and interest)
in excess of two thirds of his/ her regular monthly salary.
d) A member’s savings pledged as security for another member’s loans shall not be
surrendered to offset his/ her outstanding loan, unless the former can provide alternative
guarantorship/ security.
e) Loan repayment period may not be extended beyond the period the member specified in
the loan application form, without notification to the guarantors and approval by the
management committee.
4.7 Loan security
a) All loans shall be fully (100%) secured.
b) The management committee shall ensure loans held by members are insured by a reputable
firm
c) The obligation of the previous guarantors shall cease upon completion of loan repayment or
change of guarantors subject to the new guarantors being accepted by the society. The
obligation of the guarantors shall reduce progressively as the loan balance decreases and
shall cease when the loan guaranteed is equivalent or less than the loanee’s savings.
4.8 Collaterals
For all loan transactions, the SACCO shall require a guarantee as backup which may be a pledge,
mortgage, cash collateral and others as permitted by law.
As a minimum, an updated personal situation statement shall be available in which the
ownership of their main assets and the origin of their income are justified by documents.
4.8.1 Types of Guarantees
The Credit Committee shall determine, according to the nature of the credit, and recommend on
the approval of guarantee in order to give adequate coverage to the lending risk.
Listed below are the main types of guarantees the SACCO can accept to back up its lending
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transactions:
a) Signature Guarantee
This shall consist solely of the signature of one or more individuals or legal entities of recognized
creditworthiness and integrity who must be members of the society. A duly signed ID photocopy
shall be attached /submitted where such is the case.
b) Collateral Pledge
That constituted by personal property and under the loan conditions it shall be determined
whether it can move based on its nature and pursuant to what is determined by the SACCO.
A lien shall be established with this guarantee.
c) Collateral Mortgage
That constituted by real property by means of the establishment of a mortgage lien in the name of
the SACCO as a first mortgage.
d) Cash Collateral
That consisting of cash monetary amounts either in national or foreign currency. Negotiable
instruments, insurance policies, Fixed deposits etc
4.8.2 Guarantee Appraisal
Prior to the acceptance of a collateral pledge or mortgage, they must be appraised. This appraisal
must be performed by qualified personnel who may be external to the SACCO, to which end it
shall be required that said personnel must meet all of the requirements necessary to perform
their duties, or by the SACCO’s in-house staff, with approval for this appraisal by the Management
Committee necessary in both cases.
For the appraisal of guarantees, the SACCO must:
i. Qualify the valuers of collateral- property valuers, motor vehicle valuers.
ii. Have consultants approved by the Management Committee.
iii. The loan amounts must not be disclosed to the appraisers before they perform the
appraisals.
iv. The appraisal reports must be delivered to the SACCO without their being made
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known to the borrower.
v. The appraisals are subject to review by the SACCO if this is considered necessary.
vi. The costs incurred in the appraisal shall be covered by the members, subject to the
authorization and granting of the loan.
vii. Prior to the consideration of the requested loan, the SACCO must collect the costs
incurred in the appraisal process.
4.8.3 Other Aspects on Guarantees
a) The borrower must prove that the property belongs to them legally authorized by the owner to
encumber it, by submitting the documents indispensable to accredit him such as: certificates from
the property registrar or notarized power of attorney, as the case may be.
b) When the guarantee consists of machinery and equipment, in the legalization document each
machine (description, model, serial number, motor and chassis number, etc.) must be itemized,
their condition with the value assigned to each one, and the legal representative of the SACCO must
be appointed by means of a private contract as the depository of said machinery and equipment.
c) In cases of pledged inventories, they shall also be itemized in the legalization document and the legal
representative of the SACCO designated as their depository.
d) When the guarantee consists of trust documents, they must be signed over to the SACCO by the
member and subsequently this endorsement must be noted in the records of the authorized
institution that issued it. This shows that the SACCO will have document where collateral is
registered and monitored from time to time. In addition the movement of collateral should be
tracked and changes noted in the record.
e) A member can be granted a loan without guarantor(s) if it does not exceed 70% of his/her Shares-
Deposits/non-withdrawable Shares (Share Capital) and has not guaranteed any loan
f) No member will be allowed to guarantee more than five times his/her Shares- Deposits at any given
time. The society shall maintain a register to ensure this requirements is not violated
g) All guarantors must be members of the society in good standing and acceptable by Credit
Committee.
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h) No member of Executive Officers or any Management Committee or employee shall act as
an endorser or guarantor, for borrower from the society
i) A borrower or a guarantor may apply to the Credit Committee for a change of guarantors
j) The obligation of previous guarantors shall cease upon change of guarantors subject to the
new guarantors being accepted by the society. The obligation of guarantors shall also cease
when the loan guaranteed is fully paid, reduced to or less than the borrowers shares-
deposits in the society. The society shall maintain a record of all guarantors to every loan in
each member’s file
k) The society shall require a borrower who has no check off facility to provide extra security
for loan. The priority of such security will be 60% surrender value of an insurance policy, 50%
market value of stock quoted in the stock market, 60% value of motor vehicle
comprehensively insured, full value of treasury bonds and other negotiable instruments
certified by the Management Committee
l) Other security: Mortgage in real estate can be taken as security for a loan not exceeding two
thirds of the mortgage value.
m) The Credit Committee shall require those applying for loans to produce 100% full security for
All Loans. The SACCO will accept the following as loan security:-
Deposits/savings.
Deposits/savings of guarantor
Property, business assets, vehicles, farm land and any other security provided they
are valued at the current market rates by professional valuers and upon
presentation of authentic valuation certificates.
Group recommendation and guarantee
n) Log Books Pledged by Third Parties, the society will expect the following
Endorsement letters
Identification Card (ID) of the owners
Certificate of registrations in the case of a registered legal entity
Pin Cards for both the endorser and the applicant
ID cards for both the endorser and the applicant.
The valuation of the car and legal fees shall be paid by the loan applicant.
Up to 50% of the surrender value in the case of life insurance cover may be accepted for
loan guarantee.
o) The society will only accept valuation reports from the Automobile Association of Kenya or
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any other firms of repute that may be approved by the Management Committee,
when dealing motor vehicle log books.
p) All security offered must be in place and in possession of the SACCO before funds are
disbursed.
4.9 Collateral Management
a) The Custody of collateral/securities - will be placed on the Treasurer or manager
b) Collateral/securities movement - All collateral documents will be stamped by the SACCO’s
lawyers from the members accompanied by letters of instruction from the SACCO.
c) Once securities are perfected, the security documents will be forwarded to the treasurer for
entering into the securities register.
d) The Treasurer will countersign each entry in the securities register against the Accountant,
signature and the documents will be filled in safe custody.
e) Collateral documents called for usage in other departments like or by the SACCO’s external
professionals i.e. lawyers will be recorded in the movements register and signed for by the
person collecting on behalf.
f) Release of Collateral/securities to the Member - Securities will only be released to the
member when all liabilities in the SACCO’s books have been cleared. It is the duty and
responsibility of the person delegated by the SACCO to ensure that the member’s
outstanding balances are cleared. The dates of release will be recorded in the securities
register and signed for by the member. Documents will be released to the member by way
of notification through a signed released of collateral form signed by both the SACCO and
the member.
g) The Credit committee will monitor the movement of collateral in the SACCO. The Credit
Committee will provide a monthly report on collateral management to the Management
Committee.
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4.10 Insurance on Guarantees
4.10.1 General
The insurance accepted by the SACCO shall be regulated through this policy in order to protect the SACCO’s
interests to the extent possible. The occurrence of a claim on the debtor’s guarantees, as well as the debt of
a borrower or a surety, could render recovery of the loan difficult, if there is no adequate insurance to cover
these eventualities.
4.10.2 Liabilities
The management committee shall be responsible for evaluating the coverage of the insurance to protect
the insurable guarantees. This evaluation must appear separate from the opinion issued on each loan
application and it must be defined therein whether the guarantee offered requires insurance or not, if the
insurance is adequate and in effect or if it needs coverage greater in amounts and/or risks.
Prior to the disbursements and while the member has obligations pending with the SACCO, the
management must:
i. Monitor and record the insurance policies and take charge of the renewal and custody; for
the purpose of having in our power better control and security of outstanding amounts with
such significant guarantees.
NB; For all the cases, the insurance coverage on the guarantees offered must be at least equal to the risk
of the transaction.
4.10.3 Types of Insurance
a) Insurance on Existing Buildings and Facilities
When the guarantee consists of this type of property, the borrower must protect it by means of a policy
for events of force majeure for the entire amount of the appraisal or at least for the amount of the total
risk, including the amount of the insurance according to the economic activity for which it is being used.
This insurance shall include the risks of fire, flood, and any other.
b) Insurance on Buildings and Facilities to Be Built
During the construction period, this property must be protected by means of a “Construction Policy”,
signed for the maximum amount of the construction, ineffect as long as it lasts. When the
construction is completed, the open policy shall be replaced by an ordinary risk policy.
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c) Insurance on Machinery and Existing Equipment
These guarantees must be covered by means of a damage policy covering the amount of the appraisal
or at least the total amount of the risk. When boilers, compressors, etc., are included as part of the
equipment, an addendum must be included to cover equipment normally operating under pressure to
protect it against any damage it might suffer.
d) Insurance on Vehicles, Self-Propelled Machinery and Vessels This type of means of
transportation must be covered by means of policies especially designed for them, not only to
protect the vehicle but also “civil
liability” i.e., damages they may cause to third parties in their property or their physical integrity.
4.11 Reports
Reports shall be generated at all points of loan application process. The reports will assist the management
committee keep track of the loaning process and aid in making informed decisions. The credit committee
shall be responsible for production of the following reports by fifteenth date of the following month.
a) Loan application report
b) Appraised loans report
c) Deferred loans report
d) Declined loans report
e) Approved loans report
f) Disbursed loans report
g) Loans repayment schedule
h) Recovery variance report
i) Defaulted loans report
4.12 Default management
4.12.1 Arrears
a) A loan shall be considered to be in arrears when whole or part of an instalment is not paid on the
due date.
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4.12.2 Delinquent loans
When a loan has an instalment in arrears it’s termed as delinquent and thus at a risk and constitutes
grounds for demanding the total amount owed, taking into consideration, that the risk maintained by the
SACCO is for the total collectable amount, which requires the SACCO to enforce the acceleration of the loan
agreements signed by the borrower, however, it should be taken into account that this may be applied at
any time of the payment.
Defaults/ non performing loans
A loan shall be considered to be in default if instalments are missed and remain unpaid for a period of 90
days. The whole loan shall be deemed to be in default.
5 Loan recovery
a) The management committee shall make effort to collect loans considered to be in default.
b) Where the loan and interest balance is equal or less than the member’s savings, it shall be recovered
from the savings.
c) If the loan outstanding is greater than the member’s savings, the society shall recover the loan from
benefits due to the member through the employer.
d) Where a member defaults and the society is unable to recover the loan from his employer, the loan
shall be recovered from the guarantors.
e) No member shall be allowed to withdraw from the society if in default or has outstanding liability
either as a loanee or guarantor.
The following actions shall be taken on loans in arrears and in default
i. Mail notice shall be sent to members that have an instalment in arrears for 30days requesting the
member to pay within 14days, the letter shall be copied to the guarantor(s) for information and also
to aid in recovery process.
ii. Failure to repay the loan after 30days of issuing notice, a demand letter shall be
issued to the member and the guarantors informing them of society’s intention to
realize the security(ies) pledged for the defaulted loan.
iii. If the balance is not settled 30days after the demand notice has been issued, the
society shall recover the loan plus interest from his savings and guarantors.
iv. If the whole balance is not recovered from a members collateral and guarantors, a
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notification shall be given to the member that he/ she is being transferred to the
cooperative tribunal or a debt collector for further action on recovery at their
expense.
Days in arrears 30 60 90 120
Action Noticeof arrears
issued to the
loanee copied to
guarantors
Demand letter to
loanee and
guarantors
Recovery from
collateral and
guarantors
Handover to debt
collectors/
Cooperative
tribunal
6 Loss of a member
a) Where a member dies while repaying a loan that is not in default, the loan
balance and interest shall be paid by the insurance company, the management
committee shall therefore lodge the claim.
b) Where a member dies and has a loan that is in arrears, the loan shall be
recovered from member’s collateral and guarantors if inadequate.
7 Loan loss provision and write offs
The management committee shall recommend to the AGM from time to time loan provisioning or
writing off of bad and doubtful debts.
8 Credit committee
The credit committee shall consist of three members appointed from among the management
committee but shall not be executive committee members.
The committee shall have a chairman, secretary and a member. The
credit committee shall;
a) Make loan decisions based on the loaning policy approved by the members.
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b) Inquire carefully/ diligently into the character and financial condition of each
applicant for a loan, and his/ her guarantors, if any, to ascertain his/ her ability to
repay fully and promptly the obligations incurred.
c) Determine whether the loan is for the purpose applied for as the product
requirement.
4.9.8 Credit committee meetings
a) The credit committee shall meet at least monthly.
b) Decisions are made through a simple majority vote by the members.
c) Minutes of all the credit committee meetings shall be filled as society records.
4.9.9 Delegation
The credit committee may delegate their functions but they remain responsible.
Homepesa SACCO Society Limited
Loaning Policy Page 21
Chapter 5 SAVINGS
5.1 Savings mobilization
To mobilize savings, the society shall apply aggressive marketing efforts. Appropriate incentives
shall be applied to promote savings growth.
5.1.1 Savings products
Products Min
monthly
savings
Max No
of
withdra
wals p.a
Account
mainten
ance
balance
Min
Deposit
earning
interest
Interest
rate
computa
tion
Withdraw
al fees
Min period
of savings
(Months)
Account
Maintenance
fees
Holiday
Kids
5.2 Withdrawal of savings
No part withdrawal of savings by members shall be allowed safe for the discretionary savings
schemes introduced by the society from time to time.
Homepesa SACCO Society Limited
Loaning Policy Page 22
6.0 ADOPTION
We the undersigned Executive Committee Members hereby adopt this loan policy for and on
behalf of Homepesa Savings and Credit Cooperative Society Limited.
NAME SIGN DATE
Chairman
Vice Chairman
Hon Secretary
Treasurer
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