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GOOD FAITH

SAVINGS & CREDIT CO-OPERATIVE

SOCIETY LTD.

Contact: Good Faith Sacco Society Ltd P.O. BOX 224 - 00222 UPLANDS, KENYA TEL: 0711 263398/0708 414490 ÉMAIL: info@ goodfaithsacco.co.ke

Motto : In Faith We Grow

Acknowledgement

Motto: In Faith We Grow

The Board of Directors of Good Faith Sacco would like to express their gratitude to the pioneers of the Sacco. Eight visionary men and one visionary woman sat down in 1996 and dreamt about an organization which would economically empower the local community in order to transform their lives. Their dream was realized through the establishment of Good Faith Sacco. Without their visionary role and efforts to establish this organization we would not be where we are today. We therefore take this opportunity to express our gratitude to them and that that the organization shall always be grateful to their great contribution. We also thank every member of Good Faith Sacco for entrusting us with the management of their resource. The Boards commits to ensure the highest quality of management of the Sacco guided by our faith in God and total compliance with the by-laws, Co-operative Act and rules. May God bless you all abundantly. The Board’s recognition goes to the following founder members of the Sacco;

i. Josphat Njagi Mbugua ii. Pastor John Kabiru Kairu iii. George Mwangi Macharia iv. James Ndung’u Kabatha v. Pastor James Munyua Macharia vi. Paul Gachie Kamau vii. George Kanyora Mwangi viii. Peter Kimani Mbugua ix. Alice W. Gathu

The Board also acknowledges the hard work of reviewing the by-laws of the Sacco which has been accomplished by the By-laws Committee which comprised of Geoffrey Ndungu, Pastor James Macharia, Josphat Njagi and Peter Ngure. We would also like to thank the Board members who supported the process in different ways. We trust that this important document shall guide the Board in discharging its duties as well as enhancing the members’ participation in the Sacco.

TABLE OF CONTENTS Page

i. ABBREVIATIONS 06

ii. DEFINATIONS AND INTERPRETATIONS: 06

1.0 INTRODUCTION 08 1.1 OBJECTS 08 1.2 VISION STATEMENT 09 1.3 MISSION STATEMENT 08 1.4 CORE VALUES 08 1.5 NAME AND AREA OF OPERATION 08 1.6 REGISTERED OFFICE AND POSTAL ADDRESS 08 2.0 CO-OPERATIVE PRINCIPLES 08 2.1 CO-OPERATIVE VALUES 09 2.2 VOLUNTARY AND OPEN MEMBERSHIP 09 2.3 DEMOCRATIC MEMBER CONTROL 10 2.4 ECONOMIC PARTICIPATION BY MEMBERS 10 2.5 AUTONOMY AND INDEPENDENCE 10 2.6 EDUCATION, TRAINING AND INFORMATION 10 2.7 CO-OPERATION AMONG CO-OPERATIVES 10 2.8 CONCERN IN COMMUNITY IN GENERAL 10 2.9 AFFILITATION TO CO-OPERATIVES ORGANIZATIONS 11 3.0 MEMBERSHIP 11 3.1 QUALIFICATIONS FOR MEMBERSHIP 11 3.2 APPLICATION AND ADMISSION TO MEMBERSHIP 11 3.3 REFUSAL OF MEMBERSHIP 11 3:4 RIGHTS OF MEMBERS 12 3:5 OBLIGATIONS OF MEMBERS 12 3.6 MEMBER’S PERSONAL STATEMENT 12 3:7 CEASATION OF MEMBERSHIP 13 3:8 MEMBERSHIP WITHDRAWAL 13 3:9 EXPULSION OF A MEMBER 13 3.10 EXPULSION PROCEDURE 13 3.11 APPEALS AGAINST EXPULSION 13 3.12 REFUND TO EXPELLED MEMBER 14 4:0 NOMINEES 14 4:1 PAYMENT OF NOMINEE 14 4:2 DISCHARGE OF NOMINEE 14

5:0 FUNDS OF SOCIETY 14

6.0 DEPOSITS 15 6:1 PURCHASE OF DEPOSITS 15 6:2 TRANSFER OF DEPOSITS 15 7.0 SHARE CAPITAL 15

8:0 LIABILITIES OF MEMBERS 15 9:0 BORROWING POWER 15 10.0 LOANS 15 10.1 MEMBERS LOAN ENTITLEMENT 15 10.2 INTEREST ON LOANS 15 10.3 LOANS GRANTING 16 10.4 LOANS TO BOARD MEMBERS AND STAFF 16 10.5 SECURITY ON LOANS 16 10.6 PAYMENT OF LOANS 17 10.7 TYPES OF LOANS 17 10.8 RE-FINANCING 18 10.9 OTHER INFORMATION ON LOANS 18

11.0 DEFAULTS 18 12:0 INTEREST RATES 19 13:0 RECEIPTING OF MONIES 19 14.0 RESERVE FUND 19 15:0 ESTABLISHMENT OF BRANCHES 19 16:0 MEETINGS 20 16:1 ANNUAL GENERAL MEETING (AGM) 20 16.2 NOTICE CALLING AGM 20 16.3 QUORUM FOR GENERAL MEETING 20 16.4 MINUTES OF A GENERAL MEETING 20 16.5 FUNCTIONS OF THE ANNUAL GENERAL MEETING 20 16.6 EFFECTS OF GENERAL MEETING 21 16.7 SPECIAL GENERAL MEETING 21 16.8 MEMBERS’ INDENTIFICATION 21 17.0 CASH RESERVE 21 18.0 BOARD OF DIRECTORS 21 18.1 ELIGIBILITY FOR MEMBERSHIP TO THE COMMITTEE 22 18.2 ELECTIONS 23 18:3 TENURE OF OFFICE 23 18.4 DUTIES AND RESPONSIBILITIES OF BOARD OF DIRECTORS 23 18.5 BOARD MINUTES 24 18.6 DELEGATION OF DUTIES 24 19.0 SUB-COMMITTEES 24 19.1 EDUCATION COMMITTEE 24 19.1.1 DUTIES OF THE EDUCATION COMMITTEE 24 19.2 BUDGET COMMITTEE 25 19.3 CREDIT COMMITTEE 25

19.3.1 DUTIES OF THE CREDIT COMMITTEE 25 19.4 FOSA COMMITTEE 25 19.5 CO-OPTION TO SUB-COMMITTEES 25 20:0 OFFICE BEARERS AND THEIR FUNCTIONS 26 20.1 CHAIRPERSON 26 20.2 VICE-CHAIR-PERSON 26 20.3 HONORARY SECRETARY 26 20.4 HONORARY TREASURER 26 21:0 SUPERVISORY COMMITTEE 26 21:1 ELECTIONS 27 21:2 ROLES AND RESPONSIBILITIES OF SUPERVISORY COMMITTEE 27 22.0 PAYMENT TO BOARD AND COMMITTEE MEMBERS 27 23:0 THE CHIEF EXECUTIVE OFFICER (CEO) 28 24.0 BOOKS OF RECORDS 29 25.0 AVAILING OF BOOKS AND RECORDS 29 26.0 AUDITING 29 27.0 FINANCIAL YEAR 30 28.0 AUTHORISATION TO SIGN DOCUMENTS 30 29:0 DISPOSAL OF SURPLUS 30 30.0 COMMON SEAL 30 31:0 FINES 30 32:0 DISPUTES 31 33:0 CONFIDENTIALITY BY OFFICERS OF SOCIETY 31 34:0 PECUNIARY INTERESTS 31 35:0 ACQUISITIONS OF BY-LAWS 31 36:0 DISSOLUTION 31 37:0 AMENDMENTS OF BY-LAWS 31 38:0 ACCEPTANCES OF THESE BY-LAWS 31 Appendix I-CO-OPERATIVE SOCIETIES ACT RESOLUTION PASSED Appendix II- ACCEPTANCE

i. ABBREVIATIONS AGM - Annual General Meeting BOSA - Back Office Services Activity CEO - Chief Executive Officer FGCK - Full Gospel Churches of Kenya FOSA - Front Office Services Activity KSHs. - Kenya Shillings LTD - Limited NGO - Non Governmental Organization SACCO - Savings and Credit Co-operative SASRA - Sacco Society Regulatory Authority

ii. DEFINATIONS AND INTERPRETATIONS

a. Unless the context otherwise requires, words or phrases shall be defined and interpreted in accordance with the co-operative Societies Act No. 12 of 1997, the Co-operative Societies ( amendment) Act 2004 and the Co-operative Societies Rules 2004 made there under, hereinafter referred to as “the Act” and “the Rules” respectively and which terms shall include their subsequent amendments.

b. “Authority” – Means the Sacco societies regulatory authority.

c. “Core capital” – The fully paid up members’ shares, capital issued, disclosed reserves, retained earnings, grants and donations all of which are not meant to be expended unless on liquidation of the Sacco society.

d. “Equity” – Is the difference between assets and liabilities, or the total institutional capital and other accounts.

e. “The Board Directors” means the governing body of the society to whom the Management of its affairs is entrusted.

f. “Deposits capital” means the amount represented by a member’s portion in the equity of the society as a co-owner.

g. “Deposit” means a sum of money paid to the Society by a member on terms under which it is withdrawable at a time or in circumstances as agreed.

h. “Institutional Capital” means and is comprised of statutory reserves, entrance fees, appropriation accumulated account and other reserves established by the Society for which there is no claim.

i. “Immediate family member” – Is a spouse or other family member living in the same household or under the direct influence of the officer, member or employee of the Sacco.

j. “Officer” - Means a Director or any other person by whatever name or title may be called or described who carries out or may be empowered to carry out functions related to the overall direction of the Sacco or takes part in the general management thereof.

k. “Savings” – Means deposits payable on demand

l. “Share Capital” – This is the value of ordinary shares issued and fully paid by members.

m. “Commissioner” means the Commissioner for Co-operative Development appointed under the Act.

n. “Tribunal” means the Co-operative Tribunal establishment to hear and determine disputes arising under the Act and Rules.

o. “Supervisory Committee” means the oversight Committee elected by a General Meeting of the Society.

p. “Member in good standing” means a member who is up to date on making the required contributions of deposits, deposits, loan payment and other agreed contributions to the Society and has not in any way acted in a manner which is potentially damaging to the Society and has fully complied with the By-laws, policies and rules set by the Society.

q. Where these By-laws are set in the masculine gender they apply to the feminine gender. r. Delinquent loan – Means any loan which the principal and/or interest remain unpaid after

the due date.

s. Any questions concerning the interpretation of the By-laws or any matter not provided for therein, errors and omissions should be referred to the commissioner.

1.0 INTRODUCTION Good Faith SACCO was initially started as a self help group by some 8 Christian brothers and sisters from Full Gospel Churches of Kenya Githirioni on 10th Oct. 1996. The pioneers were drawn together by a common vision of developing a Christian institution where Christians could pool their resources together in order to save and eventually alleviate poverty so as to improve the quality of life for the members. They saw the need of coming together and supporting each other financially based on mutual Christian trust. The condition for membership was Christian commitment, a personal testimony of salvation through Jesus Christ and active membership in a Pentecostal Church. They identified the need for Christian entrepreneurship where members could save regularly and eventually have access to credit and pay back so that others could also have access to credit. Their vision was guided be Christian integrity, trust and honesty and believe that Christians can do business in a Christian way. The self-help was also going to be a means of witness and evangelization to the members and others about the saving power of Jesus Christ. They held their meetings in the house of one of the members for a period of six months as they went through the process of establishing the organization. The list of the founding members is attached in the appendix 1. Eventually members of many other Pentecostal Churches applied for membership and the SACCO started growing rapidly. By October 2001 the membership had grown from the original 8 members to over two hundred (200) members with the same aim of supporting each other financially. During the same year the leadership decided to transform the self help group to a Savings and Credit Co-operative Society (SACCO) in order to meet the needs of the growing membership better. On 21st November 2001, the certificate of registration No 9709 was presented to the newly registered SACCO – Good Faith SACCO by the District Co-operative Officer, Kiambu, in a ceremony held at F.G.C.K. Githirioni church. By 31st Dec. 2008 the membership had grown to over five hundred (500) committed Christians while the capital base had grown from Kshs. 17,000 to over 12 million. 1.1 OBJECTS

The objects for which the society is established are:-

(a) To promote thrift among its members by affording them an opportunity for accumulating their savings and to create thereby a source of funds from which loans can be made to them exclusively for provident and productive purposes, at fair and reasonable rates of interest; thereby enabling them to use and control their money for their mutual benefit.

(b) To offer complimentary savings and credit services in the form of Front Office Services

Activity (FOSA) and other savings and credit products as shall be required by the members from time to time.

(c) To carry out investments which should:-

(i) Increase the volume of output of the society (ii) Improve and maintain a healthy liquidity position (iii) Increase the level of surplus to the society (iv) Benefit members and their families (v) To perform such other functions that may be reasonably performed by a

Savings and Credit Co-operative Society with approval of the General Meeting.

1.2 VISION STATEMENT To be a leading Faith-Based SACCO with a strong financial base, offering innovative and diversified products and services in Kenya. 1.3 MISSION STATEMENT To promote mobilization of savings, giving financial services at competitive rates and ensuring surplus results to improve the social economic status of members and the community at large. 1.4 CORE VALUES

• Honesty • Professionalism • Team-work • Respect • Integrity • Transparency and accountability • Effectiveness and efficiency • Diligence • Community social responsibility

The above core values shall set the norm that will guide this SACCO’s operations and reflect its culture and values in relation to all the stakeholders. 1.5 NAME AND AREA OF OPERATION

The society shall be called Good Faith Savings and Credit Co-operative Society Limited here in after referred to in these By-laws as “the society’ and its area of operation shall be within the Republic of Kenya. 1.6 REGISTERED OFFICE AND POSTAL ADDRESS The registered office of this society shall be at Kiwa House, Nyambari, plot Number LR Kiambu /Lari 96, Ground Floor, Room Number 1 and its Postal Address is 224-00222 Uplands. Notice of any change shall be given to the commissioner for co-operatives development and to all members of the society. 2.0 CO-OPERATIVE PRINCIPLES

In order to achieve the objectives for which it is established the Society shall practice the following principles. 2.1 CO-OPERATIVE VALUES The Society shall be based on the values of self-help, mutual responsibility, equality and equity. It shall practice honesty, openness and social responsibility in all its activities. 2.2 VOLUNTARY AND OPEN MEMBERSHIP The primary purpose of the society shall be to serve its members and as applicable non-members in a prudent and effective manner.

Membership of the society shall be open on a voluntary basis, without political, religious, ethnic, gender or social discrimination to all who qualify and can contribute to and benefit from its activities. 2.3 DEMOCRATIC MEMBER CONTROL The society shall be a democratic and participatory organization actively controlled by its members who shall enjoy equal voting rights on a “one member one –vote” basis. 2.4 ECONOMIC PARTICIPATION BY MEMBERS Members shall contribute equitably to the capital of the society and deposits in the results of its operations. The society shall endeavor to pay a competitive rate of dividend/interest on capital, and to compensate employees fairly according to prevailing standards. Members may allocate surpluses for any of the following purposes:-

(a) Developing the business of the society (b) Benefiting members in proportion to their involvement with the society (c) Encouraging further development of the co-operative movement (d) Contributing to community or charitable purposes.

2.5 AUTONOMY AND INDEPENDENCE The society shall be an autonomous, mutual-help organization controlled by its members. If the society enters into any agreement with the Government or Non-Governmental Organizations it shall do so freely on mutually acceptable terms that will ensure its continued autonomy. 2.6 EDUCATION, TRAINING AND INFORMATION The society shall foster reciprocal, ongoing education programmes for its members, committee employees and the general public, so that they can teach – and learn from each other in understanding and carrying out their irrespective roles. The society shall endeavor to inform the general public particularly young people and opinion leaders about the nature and benefits of the Co-operative Movement. 2.7 CO-OPERATION AMONG CO-OPERATIVES In order to best serve the interests of its members and the community at large, the society shall actively co-operate in every practical way with other co-operative societies and organizations locally, nationally and internationally. 2.8 CONCERN FOR COMMUNITY IN GENERAL The society shall keep itself abreast with the concerns of the community it serves. While focusing on members needs it shall also strive towards suitable development of the community through policies that are respectful of the environment and acceptable to the membership.

2.9 AFFILIATION TO CO-OPERATIVE ORGANIZATIONS The Society may become a member of or seek affiliation to other relevant organizations by a resolution of the members in a General Meeting.

3.0 MEMBERSHIP

3.1 QUALIFICATION FOR MEMBERSHIP

A person of either sex shall be eligible for membership to the society and shall posses all the following qualifications;

i. To qualify for membership an applicant shall be a registered and committed member of a Christian Church and shall be introduced by a local church Pastor.

ii. Must be above eighteen years and a Kenyan Citizen

iii. Submit a copy of the national identification card, two passport size photographs

iv. Must be of good character and sound mind.

v. Must not be a member of any savings and credit co-operative society having similar

objectives.

3.2 APPLICATION AND ADMISSION TO MEMBERSHIP For one to be admitted as a member one shall; i. Fill in a membership application form

ii. Pay a non refundable membership entrance fee of Kshs. 600.00.

iii. Pay the current agreed minimum deposit for the month of admission.

iv. Buy a minimum non-refundable share capital of Kshs. 1,000.00. A member may

transfer the shares to other members on leaving the membership of the Sacco Society but the Sacco Society shall not refund the shares. The share capital may earn dividend at a rate to be determined by the Board of Directors subject to the SACCO’s performance.

v. Pay the minimum monthly non-withdrawable deposit of two hundred shillings (Ksh.

200.00) which shall be used as collateral against borrowings and shall be refunded when membership is withdrawn. The non-withdraw able deposit may earn interest at a rate to be determined by the Board of Directors subject to performance of the SACCO.

vi. Return the application form duly signed by the applicant’s pastor.

3:3 REFUSAL OF MEMBERSHIP The Board of Directors may refuse Membership to any applicant, giving him/her reasons for refusal in writing.

3:4 MEMBERSHIP RIGHTS

Subject to these By-laws, policies, standards, values and procedures, all members shall have the right to enjoy the Society’s services and exercise the rights established by the Act, the Rules and these By-laws. Members are entitled but not limited to:-

i. Receive periodically and regularly, or upon request and at least quarterly, a statement of the Members Account.

ii. Attend and participate in all General Meetings of members. Each member shall have one vote irrespective of the deposits holding.

iii. Elect or be elected as an officer of the Society, unless otherwise prohibited by any other law or where specifically disqualified by these By-laws.

iv. Use the Society services according to the policies and procedures approved by the Board of Directors

v. Submit proposals or recommendations to the Board, for the improvement of the Society’s Services.

vi. Other rights as prescribed by the Act and Rules. vii. Provided that a member who qualified for Membership into the Society by virtue of his

or her employment with the Society shall not be eligible for election to any organ, Committee or office of the Society save that of his or her employment.

3:5 MEMBERSHIP OBLIGATIONS In complement to the Act and Rules, members of the Society are obliged to:-

i. Pay monthly deposits (Minimum monthly deposit is Ksh. 200.00). ii. Service loans faithfully

iii. Attend all General Meetings iv. Show a good co-operative spirit v. Inform non-members and encourage them to join the Sacco

vi. Bring out problems affecting the Society and look for solutions vii. Participate in the Society’s projects both physically and financially

viii. Attend Educational Meetings and seminars organized by the Society or other organizations approved by the Board of Directors

ix. Make use of the services of the Society as stated in the objects of the Society. x. Comply with these By-laws, the Co-operative Societies Act, Rules and Resolutions of

General Meetings. 3:6 MEMBER’S PERSONAL ACCOUNT The member’s personal account shall show the following:-

i. Membership number ii. All correspondences

iii. Registration details

3:7 CEASATION OF MEMBERSHIP Membership of the society shall cease with effect from the date of a member’s:-

i. Death ii. Withdrawal

iii. Expulsion from society iv. Becoming certifiably insane v. Transfer of deposits

vi. Being declared bankrupt in a court of law vii. Loss of qualification of membership under By-Law No.3.1

3:8 MEMBERSHIP WITHDRAWAL A member may at any time withdraw from the society by giving a written notice of sixty (60) days. 3:9 EXPULSION OF A MEMBER Subject to the grounds of expulsion that may be contained in the Act and Rules, a member may be expelled by a General Meeting on the following grounds:-

i. Where his activities are detrimental to the society’s interests particularly if he makes consciously untrue statements to the Board of Directors, the Supervisory Committee or an Ad hoc Committee or the General Meeting.

ii. Where a member fails to fulfill any of his/her obligations to the society including failure to make required contributions of deposits, deposits or loan repayments is required.

iii. If he/she is convicted in a court of law of a criminal offence involving dishonesty or fraud or is imprisoned for a period of three months or more.

iv. If he/she is discovered to be a member of another Savings and Credit Co-operative Society having similar objects.

v. Acts in any manner prejudicial or detrimental to the interests of the society. 3.10 EXPULSION PROCEDURE

i. Upon formal and written announcement and proof that a member has committed a violation punishable by expulsion the Board of Directors shall serve a written notice to the member stating the reason/s for the proposed expulsion and grant the member 30 days to file a defense.

ii. Upon expiry of 30 days and taking into consideration the member’s defense the Board of Directors shall initiate an administration enquiry and take a decision on its findings in 30 days.

iii. If the Board establishes that the member is guilty of the offence committed the decision to expel him/her shall be in writing.

3.11 APPEALS AGAINST EXPULSION A member so expelled by the Board of Directors shall have the right to appeal to the General Meeting provided the notice and grounds for such appeal shall be filed with the Honorary Secretary or the CEO. The decision of the General Meeting on such expulsion shall be final provided such a member shall have the right to refer the issue to the tribunal.

3.12 REFUND TO EXPELLED MEMBER Any member who is expelled from the Society shall be repaid the following amounts after deductions of any debts owed by him/her to the Society as borrower, endorser or otherwise;

i. The nominal or book-value of his/her deposits provided, however, the Board of Directors may require a maximum of sixty (60) days written notice of intention to withdraw deposits

ii. Any dividends or interest due to him/her on the date membership ceased. 4:0 NOMINEES

i. Each member shall nominate one or more persons in writing as his/her nominee(s) to whom on his/her death, deposits, deposits, or other interest shall be vested and such appointment shall be in writing and attested by two witnesses who are members of the Society. Provided that a member shall have the right to change his/her nominee(s) in writing and signed by the member in the presence of two attesting witnesses who are members of the Society.

ii. The particulars of nominee(s) shall be recorded on Form VII set out in the schedule to the

Rules and kept in a sealed envelope in the custody of the Manager or Secretary and whose reference shall be entered in the register of members.

iii. Where more than one nominee is appointed by any member, the number or proportion of deposits, deposits or other interests to be transferred to each nominee shall be specified at the time of appointment. Provided, however, that where no amount is specified the nominees shall receive equal deposits.

4:1 PAYMENT TO NOMINEE

In the event of death of a member, the society after satisfying itself and after obtaining such documentary proof of the death of a member as it may consider necessary, shall pay to the nominee(s) the value of the deceased member’s deposits, deposits, interest and dividend after deducting such sums as may be due by the member to the Society, as soon as possible.

4:2 DISCHARGE OF NOMINEE

After paying the nominee(s) the value of deceased member deposits, deposits or interest, less any sums due to the Society ; the nominee(s) obligations by the Society shall be discharged; incase the nominee is a member of this society he/she is at liberty to convert the benefits to deposits.

5:0 FUNDS OF SOCIETY

The funds of the Society shall consist of:- i. Membership entrance fee of Kshs. 600

ii. Un-limited number of deposits of a value of Kshs. 20.00 each. iii. Deposits or loans repayable from member or non-members iv. A reserve fund of 20% of the net surplus and such other reserves as may be established with

the approval of the General Meeting. v. Any surplus resulting from operations of the Society

vi. Donations, grants and / or gifts from other bodies or individuals

vii. Funds obtained from lawful miscellaneous sources. 6.0 DEPOSITS “Deposit” means a sum of money paid to the Society by a member on terms under which it is withdrawable at a time or in circumstances as agreed.

i. Deposits shall be a minimum of Ksh. 200.00 payable per month. ii. No member shall be allowed to hold more than a fifth (20%) of the total deposits.

6:1 PURCHASE OF DEPOSITS Any amount may be accepted towards the purchase of deposits, provided however, that the Board of Directors may fix a minimum amount that may be paid by the member at any one time subject to approval by the General Meeting. 6:2 TRANSFER OF DEPOSITS (a) With approval of the Board of Directors, a member may at any time transfer his/her deposits

to another member but not to any other person. Such transfers must be in writing and at nominal value.

(b) All transfers of deposits must be registered with the Secretary, and no transfer shall be valid

unless so registered. A transfer fee shall be determined by the Board of Directors from time to time.

7.0 SHARE CAPITAL The share capital shall be a minimum of non-refundable Kshs. 1000 and is subject to review. The society shall not grant a loan or credit facility against a member’s shares. 8:0 LIABILITIES OF MEMBERS

(a) The liability of a member shall be limited to the nominal value of deposits held by him/her.

(b) In the event of liquidation, where available funds are insufficient to pay the full nominal value of the deposits held by the members, the funds shall be distributed pro-rata among the deposits holders according to the amount of deposits held by each.

9:0 BORROWING POWER (a) Loans may be obtained from members and non-members subject to the maximum (b) Approved by the General Meeting and the Commissioner. (c) For the security of any loans accepted by the Society, under paragraph (a) above, the

Society may grant a charge over its assets. The authority to grant a charge shall be reserved to the General Meeting.

10.0 LOANS Application for loans by members only through filing in one loan application form which will be costing such amount fixed by one CMC subject to approval by AGM.

10.1 MEMBERS’ LOAN ENTITLEMENT The maximum amount of total loans to a member at any one time shall not exceed three times a members total deposits and deposits or exceed 5% of the Society’s total deposits capital, members deposits and reserves unless an exemption is given by a General Meeting. 10.2 INTEREST ON LOANS

The rate of interest on loans shall be recommended by the Board of Directors, provided it does not exceed prevailing market rates, subject to approval of the General Meeting.

10.3 LOANS GRANTING i. Loan applications shall be considered in the order in which application is made, unless

the loan is deemed by the committee to be ‘an emergency loan’. Whenever there are more applications for loans pending than there are funds available, reference shall be given in all cases to applicants with small loans, if need and credit standing of the applicants are nearly equal.

ii. Loans shall be given only for worthy purposes that will benefit the borrower.

iii. The Credit Committee may require an applicant to appear before it personally to be

interviewed in respect for his application for a loan.

iv. No loan shall be made to a member in excess of 5% of the society’s total deposits capital, deposits and reserves nor for a period exceeding three years, provided however, that loans for capital expenditure may be granted for a period not exceeding four years.

v. The loan application form shall clearly state the amount of the loan, the rate of interest,

the terms of repayment and security.

10.4 LOANS TO BOARD MEMBERS AND STAFF Loans may be granted to the members of the Board of Directors and employees of the society who are members only if:-

i. The loans are approved or ratified by the Board of Directors, and where the applicants

attend Board meetings or staff, they shall not be present in the meeting considering their loan applications.

ii. All the loan applications are in accordance with the By-laws and not on terms more favorable than those extended to other borrowers.

iii. The loan is approved by the Credit Committee, and thereafter by the Board of Directors.

The Board shall notify SASRA of every approval given pursuant to paragraph (i) above within fourteen days of such approval.

10.5 SECURITY ON LOANS

i. The Credit Committee shall ask for such security for loans as it may consider necessary. The deposits of a member may be accepted as security.

ii. In the event of a willful default for two months, the committee may recall the whole

loan.

iii. Where there is after ninety days, continued delinquency, the Committee may offset the loan balance.

iv. A borrower or guarantor may apply to the Credit Committee for a change of guarantor provided the Credit Committee may for good cause demand a change or increase of guarantee.

v. No Board member or Supervisory Committee member shall act as an endorser or

guarantor for borrowers from the Society. 10.6 PAYMENT OF LOANS

i. A borrower may, on any day on which the society is open for business repay his loan in whole or in part prior to maturity.

ii. At every regular meeting of the Board of Directors, the item “Loans’ shall appear on

the agenda. At the meeting, the Treasurer or Manager shall present an up-do –date listing of delinquent borrowers showing:-

o Name of borrower o Account number o Date of loan o Date of last payment o Unpaid balance of loan o Number of months delinquent o Borrowers deposits and deposits balance o Security, or guarantors, if any.

The Board of Directors shall thereupon take action to collect the overdue accounts. Any loan three months overdue may be referred to the guarantor (s) to make good. 10.7 TYPES OF LOANS The society shall mainly grant the following types of loans:-

a. Development Loans This shall be considered in the order with which applications are received. Preference will be given as follows:-

i. Members who have never been granted any loan ii. New members who have qualified for loans

iii. Members who have cleared their loans and have applied for fresh loans. Repayment period for development loans shall be governed by the Loans Policy

b. Emergency Loans This will include sudden hospitalization, funeral expenses, court fines and other unforeseen calamities but shall not include rent, bank loans and credit cards.

i. No member shall qualify for an emergency loan while still serving a previously granted emergency loan.

ii. Emergency loan applications must be supported by relevant documents relating to the nature of the emergency as and where applicable.

iii. The repayment period for an emergency loan shall not exceed 12 months. (c) Educational Loans

This will include fees for pre-primary, primary, secondary, colleges and both local and overseas universities.

i. The total outstanding loans, including school fees must not exceed the limit of deposits and deposits as provided for in the “Loans Policy’.

ii. Only one educational loan may be granted in one year. iii. Educational loans must be repaid within 12 months.

(d) Special Loans

i. The Board of Directors shall introduce “Special Loans” for periods not exceeding twelve months to assist members meet their short term financial needs.

ii. Terms and conditions for “Special Loans” shall be formulated by the Board of Directors and approved by the General Meeting including the rate of interest which may be different from that normally charged on other loans.

iii. Special loans shall cover Business Loans and other short term financial needs of members.

(e) Hospitality Loan/instant If a member has visitors who are to bring financial support to the family and the member requires some money to host them, a loan not exceeding Ksh. 20,000.00 repayable within one week at an interest of 5% may be provided.

10.8 RE-FINANCING The refinancing of a loan balance or any request for an extension of time in which to pay shall be agreed by the Board of Directors only in the most exceptional circumstances 10.9 OTHER INFORMATION ON LOANS

(a) Loan application forms will be issued to eligible members at a cost to be determined by the Board of Directors.

(b) The properly completed loan application forms shall be submitted to the Society’s office. (c) It shall be an offence for any applicant, Society employee or members of the Board of

Directors or Supervisory Committee to give false information regarding deposits, deposits, loans and guarantees.

(d) When a loan application is rejected, the Sacco Society shall communicate to the applicant in writing the reasons for the rejection within fourteen days.

11.0 DEFAULTS

(a) Where a member wishes to withdraw from the Society the member will be required to give the Society written notice of up to 60 days of the intention to withdraw.

(b) No member shall be allowed to withdraw from the Society membership unless the

member’s loan is repaid in full, and provided such a member satisfies the Society that all loans guaranteed have been fully recovered, or the balance does not exceed the deposits and deposits of the members whose loans were guaranteed.

(c) A member who is an official/staff who withdraws due to resignation s/he shall be

required to clear all outstanding loans and provide alternative guarantors in case of loans guaranteed before resignation.

i. In case a loan is not repaid for a month, the Society shall inform the loanee immediately in writing with a copy to each guarantor. If no repayment is effected during the second month, the guarantors shall be called upon to honor their obligations during the third consecutive month. However, the Society will still maintain its right of set off to recover the defaulted loan from the loanee where it is practicable to do so.

ii. No member will be allowed to withdraw part of his/her deposits or deposits or offset

part of the deposits or deposits against an outstanding loan unless s/he ceases to be a member of the society.

(d) Where a member changes the Common Bond s/he may transfer his/her deposits to the

Society of the new Common Bond if any. A member must clear any outstanding loan with the society which shall transfer deposits directly to the new Society by drawing a cheque in the name of the Society if the member so requests.

12:0 INTEREST RATES The rate of interests on deposits or loans shall be recommended by the Board of Directors, provided it does not exceed prevailing market rates, subject to approval of the General Meeting. 13:0 RECEIPTING OF MONIES

i. Money paid in or out on account of deposits, deposits, loans, interest, fees or fines shall be evidenced by a printed receipt with a carbon copy in a form to be approved by the Board of Directors.

ii. Should the receipt given to the member by the Society be lost or destroyed immediate notice of such fact shall be given to the Treasurer or Manager who may be authorized by the Board of Directors to issue a duplicate receipt. The Board of Directors may require the member to sign an indemnity to protect the society against any loss due to the issuance of such duplicate. The Board of Directors may also require payment to the society of a reasonable charge to cover the cost of issuing the duplicate. A fee of Kshs.50 shall be charged for each duplicate issued.

14.0 RESERVE FUND

i. The society shall pay into the reserve fund, maintained in pursuance of the provision of the Act, 20% of the surplus resulting from the operations of the Society during a financial year.

ii. The reserve fund of the Society shall be invested in the manner provided for in section 45 of the Act.

iii. No withdrawals shall be made from the reserve fund of the Society without the consent in writing of the Commissioner and any such withdrawals shall be made good from the net available funds accruing to the Society if the Annual General Meeting so direct.

iv. The reserve fund shall be indivisible and no member shall be entitled to claim a specific deposit of it.

15:00 ESTABLISHMENT OF BRANCHES The Board of Directors may establish branches of the Society at any part of Kenya as may be deemed necessary for the better functioning of the Society and effective delivery of services to members.

i. The criteria for the establishment of branches shall be set by the Board of Directors by reference to membership or volume of activities at the proposed branch.

ii. Once established a branch shall not be closed without authority of a General Meeting. 16:0 MEETINGS There shall be three sets of meetings:-

i. Annual General Meeting (AGM) ii. General Meeting

iii. Special General Meeting 16:1 ANNUAL GENERAL MEETING (AGM) The supreme authority of the society shall be vested in the General meetings. i. The Annual General Meeting shall be held within four months after the end of each

financial year. The Annual General Meeting shall hold elections and undertake such other business as is laid down in these By-laws.

ii. Any business not completed at the Annual General Meeting may be taken up by a subsequent Special General Meeting or at the next Annual General Meeting.

16.2 NOTICE CALLING AGM At least 15 days notice shall be given in the case of an Annual or Special General Meeting. The Secretary or Manager shall take all possible and usual steps, such as announcements in the Churches, posting a notice on the Society’s notice board or boards, an advertisement in the local media and inform all members of the date, venue and main business of the meeting. All written notices shall include a statement of the business to be dealt with. 16.3 QUORUM FOR GENERAL MEETING Except when convened by the Commissioner, the presence of at least 100 members or 50% of the total registered members, whichever is, less shall constitute a quorum for the conduct of business at a General Meeting. When a quorum is not attained, the Chairman shall adjourn the meeting, which shall be advertised as prescribed in the By-laws. If at such a meeting a quorum is again not attained, the chairman shall declare the meeting open with those present one hour after the advertised time of the meeting. 16.4 MINUTES OF A GENERAL MEETING All business discussed or decided at the General Meeting shall be recorded in a minute book which within one month of the meeting and shall be verified by the Board that in their opinion the minutes are true and complete record of the previous AGM. 16.5 FUNCTIONS OF THE ANNUAL GENERAL MEETING The annual General Meeting shall:-

i. Consider the minutes of the previous meeting and consider matters arising there from. ii. Consider the statements of account, the Auditors report, the inspection notes of the

Commissioner, and the reports of the Committees on activities of the Society during the past financial year.

iii. Decide the disposal of net surplus resulting from operations of the Society during the past financial year.

iv. Ratify actions taken by the Committees, and give directions to the new Committees – where necessary.

v. Consider appeals against the expulsion of members and refusal of membership by the Board of Directors.

vi. Elect, or remove members of the Board of Directors and Supervisory Committees. vii. Fix the maximum liability, which the society may incur on loans and deposits, whether

from members or non – members. viii. Approve the estimates of income and expenditure for the next financial year following

the Annual General Meeting. ix. Fix the honoraria and bonus if any, for the Board of Directors and Supervisory

Committees, retiring officers and employees of the Society. x. Elect the members in consultation with the Board of Directors to represent the society in

a Co-operative Union or other apex bodies of which the Society is a member. xi. Transact any other business of the Society in which notice has been given to members in

the manner prescribed in these By-laws. xii. Appoint auditors from a list approved by the commissioner.

xiii. Determine the amount of indemnity for Management and Supervisory Committee members.

16.6 EFFECTS OF GENERAL MEETING A decision taken by the General Meeting shall be binding to all members present, absent and objecting. 16.7 SPECIAL GENERAL MEETING

i. A Special General Meeting shall be held when convened by the Board of Directors, the Commissioner or his representative or within 15 days of receipt of a written request from at least 25% of the members.

ii. For a Special General Meeting requested by members, the request must state the object of the meeting called, and be signed or thumb-marked by the requesters. The request shall be deposited in the registered office of the society.

iii. If the Board of Directors fails to convene the requested meeting the members requesting the meeting may themselves convene the meeting by giving notice to all the other members stating the objects and reasons for the meeting and the fact that the Board of Directors failed to convene the meeting as requested.

16.8 MEMBERS INDENTIFICATION Before they may attend or vote at General Meetings, the members shall provide evidence of their membership. 17.0 CASH RESERVE Except as otherwise authorized by the Commissioner, a cash reserve must be maintained of not less than 10% of the total deposits capital and deposits for the specific purpose of meeting requests for deposits or deposits withdrawal and other emergency pay-outs. The cash reserve may consist of cash in hand, the current account, the society’s savings account, fixed deposits and other investments with a maturity period not exceeding 90 days. 18.0 BOARD OF DIRECTORS

i. The Board of Directors shall be the governing body of the society and shall be elected by members at an Annual General Meeting. The Committee shall consist of 9 members who include; Chairman, Vice-Chairman, Treasurer and Secretary all of whom shall be elected by the Committee from amongst the committee by secret ballot. To be elected in this committee a member must be in good standing. The committee shall sign an indemnity to protect the society from any loss due to non-performance of its duties.

ii. At least 5 of the total number of the members of the committee shall form a quorum for

the disposal of business.

iii. The term of office for the committee shall be three years. One third of the members shall retire annually but shall be eligible for re-election. The Chairman, Vice-Chairman and one Committee member shall retire in the third year, but shall be eligible for re-election for a maximum of two terms subject to amendment of the Co-operative Act and the Minister’s rules.

iv. If a member of the Board of Directors fails to attend three consecutive meetings without

being excused there-from or otherwise fails to perform his/her duties, the position may be declared vacant and the vacancy filled as provided by these by-laws.

v. If during the term of office of the committee a vacancy occurs the committee shall co-opt a new member from eligible society members, provided the total number of Board of Directors members falls below 5. The vacant positions shall be formally filled during the next AGM by following the election procedures.

vi. Elected members of the committee who fail to perform or whose conduct is wanting shall be removed by a two-thirds majority of the members of the society present and voting at a General Meeting. The replacement of the vacant position/s shall follow the society’s election procedures.

vii. Every retiring member who has served the society well shall be provided with a token of appreciation according to the recommendation of the Board of Directors.

18.1 ELIGIBILITY FOR MEMBERSHIP TO THE BOARD OF DIRECTORS

(a) No member shall be eligible for election into the Board of Directors unless s/he is a member of the Society for at least two year preceding the Annual/Special General Meeting in which elections are held.

(b) Nobody shall be eligible to be elected into the Board of Directors or remain in the Committee if s/he:

i. Is below eighteen years of age

ii. Is delinquent iii. Is of unsound mind iv. Is directly or indirectly a money lender or carrying out activities detrimental to

the aims of the Society. v. Has ever been adversely mentioned in an inquiry report handled by the

Commissioner and approved by a General Meeting. vi. Has ever been convicted of any offence involving fraud or dishonesty and

imprisoned for a term of 3 months and above. vii. Is unable to read and write.

viii. Receives any remuneration, salary or other payments from the society save in accordance with the Act.

ix. Is a committee member in another Co-operatives Society. x. Is not a member in good standing.

xi. Is a dismissed employee of any co-operative society xii. Has not within thirty days of being elected or appointed, declared his wealth to

the Commissioner in the prescribed manner.

xiii. Has not filed an indemnity with the Commissioner in Form V within 14 days of his election to the Committee.

xiv. Has been convicted of any offence under the Co-operative Act or Rules made there under.

xv. Has any un-cleared debt owing to the Society at the end of its financial year including a loan whose repayment period has expired

xvi. Is a person against whom any amounts of money is due under a decree, decision or order or is pending under the Act.

xvii. In pursuance of the original vision of the society is not a member of a Pentecostal church.

18.2 ELECTIONS

i. All elections shall be by a show of members hands, unless, a secret ballot is specifically requested by a majority of the members present.

ii. No member shall be entitled to vote by proxy. iii. Irrespective of the number of deposits held by him/her, no member shall have more than

one vote. iv. Within ten days after the elections, the names and addresses of all persons elected to

office shall be forwarded by the Secretary or Manager to the Commissioner for co-operatives.

18.3 TENURE OF OFFICE The members of Board shall hold office for a period of three years provided that, one-third of the board members shall retire every year but will be eligible for re-election. 18.4 DUTIES AND RESPONSIBILITIES The Board of Directors shall consist of elected non executive directors. In the conduct of the affairs of the Sacco Society, the Board of Directors shall exercise prudence and diligence of “ordinary men of business” and shall be held, jointly and severally liable for any loss occasioned by their actions which are contrary to the act, rules, these by-laws or the direction of any General Meeting of the Sacco Society or any other applicable law. The Board of Directors shall;

i. Ensure that the Management maintains proper and accurate records that reflect the true and fair position of the Sacco Society’s financial condition.

ii. Ensure that the Sacco Society functions effectively and that adequate and effective internal control systems are put in place.

iii. Establish appropriate policies for the Sacco Society. iv. Meet not more than twelve times in a financial year and not more than two months shall

lapse between the date of one meeting and the date of the next meeting. v. Ensure that that the Sacco makes adequate provisions for known and probable losses

likely to occur as required by these regulations. vi. Ensure that the Sacco Society maintains a positive image within the industry and the

economy as a whole. vii. Establish such number of Board of Directors, Management committee, including an audit

and credit committee as may be necessary to effectively discharge its functions. viii. Attend board meetings regularly and shall automatically cease to hold office if he or she

fails to attend three consecutive board meetings without permission or reasonable cause.

ix. Recommend from time to time the interest rates on loans, subject to approval by the General meeting.

x. Recommend to the Annual General Meeting the dividend rate to be paid on deposits and interest refund (if any) to be paid to borrowers.

xi. Fill vacancies occurring in the Board of Directors, Management and any sub-Committees between the General Meetings.

xii. Recommend investments by the Society to the General Meeting. xiii. Authorize borrowing and lending operations of the society in accordance with Act and

Rules subject to General Meeting approval. xiv. Designate a depository, or depositories, for the funds of the society. xv. Recruit, employ and fix the remuneration of a Manager and such other employees as may

be necessary to carry on the business of the Society. xvi. Impose fines under these By-law No. 36.

xvii. Recommend the interest rate, which shall be paid on deposits and borrowed money. xviii. Institute and defend suits and other legal proceedings brought in the name of or against

the Society. xix. Perform such other duties as the members may from time to time direct and indirect. xx. Perform or authorize any act consistent with the Act, Rules and these By-Laws , unless

specifically reserved for a General Meeting. 18.5 BOARD MINUTES All business discussed or decided at Board Meetings shall be recorded in a minute book which, within one week of the meeting, shall be signed by the chairman and the secretary to verify that, in their opinion, the minutes are a true and complete record of all important matters which were discussed or decided at the meeting. At the next meeting, after approving any alterations or variations which shall be written immediately below the above signatures, and not as alterations to the original record, the meeting shall authorize the Chairman to sign and date the final record. 18.6 DELEGATION OF DUTIES The Board of Directors may delegate to any member/s of the Board of Directors, Branch Committees or employee/s of the society such of its powers as it deems necessary provided that the Board shall be held responsible for any of their acts/actions which are not procedural. 19.0 SUB-COMMITTEES The Board of Directors may appoint other committees such as Education Committee, Budget Committee, Credit Committee etc. Such appointed committees shall consist of persons drawn from the Board of Directors. 19.1 EDUCATION COMMITTEE The Education Committee shall consist of three members who shall be members of the Board of Directors including the Vice-Chairman of the Society who shall be the Chairman of the Committee. DUTIES The functions of the Education Committee shall be to:-

(a) Organize, facilitate and promote members’ and Committee Members’ education. (b) Organize, promote and oversee staff training for Society employees. (c) Ensure production and acquisition of literature including periodicals, magazines or

brochures for information of members.

(d) Promote distribution and interpretation of these By-laws to members. (e) Arrange education tours in liaison with the Board of Directors. (f) Advise the Board of Directors on all matters of education and information. (g) Ensure allocation of funds for educational purposes and apply the funds for the

benefit of members. (h) Prepare periodic reports on educational information and publicize the same for the

benefit of members. (i) Identify, collect, disseminate and publish Co-operative news for the benefit of the

Society. (j) Educate members and publicize information on the various products, packages and

services offered by the Society. (k) Perform any other duties assigned by the Board of Directors.

19.2 BUDGET COMMITTEE A sub-committee shall be formed to set up and to draw the Annual Budget and follow its allocation. No expenditure shall be authorized by the Board of Directors unless it is provided for in the estimates of income and expenditure formally approved by the General Meeting at least three months before the start of each financial year.

19.3 CREDIT COMMITTEE The Credit Committee shall hold such meetings as the business of the Society may reasonably require, but not less frequently than once a month.

DUTIES (a) The Credit Committee shall design, monitor and review the lending policy of the

Society. (b) The Credit Committee shall inquire fully and diligently into the character and

financial condition of each applicant for a loan and his guarantors, if any, to ascertain his/her ability to repay fully and promptly. The committee shall also review the obligations incurred on him, and determine whether the loan is for a worthy purpose and will be of probable benefit to the borrower. The Credit Committee must keep a record of its actions.

(c) The Credit Committee shall report to the Board of Directors as the Board shall require.

(d) The Credit Committee shall advise the Board of Directors on delinquent loans. 19.4 FOSA COMMITTEE There shall be established a FOSA sub-committee whose membership shall be drawn from the Board of Directors of the Sacco. The FOSA sub-committee shall consist of not less than three members who shall elect a Chairman and a Secretary. The duties and responsibilities of the FOSA sub-committee shall be generally to manage the affairs of the FOSA as shall be directed by the Board of Directors. The Board of Directors may delegate all or some of the duties and responsibilities of FOSA sub-committee to the Society’s Manager. 19.5 CO-OPTION TO SUB-COMMITTEES When any Sub-Committee member is absent, disqualified or otherwise unable to perform his duties, the Board of Directors may co-opt another Committee member to serve on the Sub-Committee until the next General Meeting.

20.0 OFFICE BEARERS AND THEIR FUNCTIONS The Chairman, the Vice-Chairman, The Treasurer and the Secretary shall be termed Executive Officers of the Society and shall be elected at a meeting of the Board of Directors within seven days of the General Meeting in which elections were held. 20.1 CHAIRPERSON

i. The Chairperson shall preside at every General Meeting. He shall also preside at all Board of Directors meetings and perform such other duties as may be directed to perform by the Board of Directors, not inconsistent with provisions of the Act, Rules and these By-laws.

ii. He shall prepare or cause to be prepared the agenda of Sacco meetings. 20.2 VICE CHAIRPERSON

i. The Vice-Chairman shall perform the duties of the chairman during his/her absence, and shall perform such other duties as he/she may be directed to perform by the Board of Directors.

ii. He shall be the Vice-Chairman of the Education Committee. iii. He shall ensure capacity building for the Board members, staff and the society members

on co-operative matters at least once every year. 20.3 HONORARY SECRETARY The duties of the secretary are:-

i. To record or cause to be recorded minutes of all Committee meetings and General Meeting.

ii. To prepare and send notices of meetings. iii. To ensure that the society’s correspondence is promptly and correctly attended to; iv. To arrange in consultation with the Chairman the calling of meetings as and when

necessary. v. To ensure that correct and adequate records are kept of savings and deposits received

from members, loans paid to them and repayment thereof. 20.4 HONORARY TREASURER The duties of the Treasurer shall be:-

i. To manage generally or cause to be managed the financial affairs of the society in a competent manner.

ii. To ensure that a proper record is kept of all monies, received and paid out by the society, its assets, liabilities, capital, reserves and its income and expenses.

iii. To ensure the safe keeping of the society’s money, securities and books of accounts iv. To ensure that all payments and expenditures are duly authorized and within the budget. v. To ensure compliance with all directives of the Board of Directors and the Commissioner

on the Management of society finances. 21:0 SUPERVISORY COMMITTEE The supervisory Committee is responsible for the Co-operative Society compliance, internal control and oversight. It is also responsible for the truth and accuracy of the society’s financial condition and for making sure that the society’s administrative procedures are adequate to safe-guard the members and institutions rights and interests.

21.1 ELECTIONS The Supervisory Committee shall be elected by the members during the Annual General Meeting. The Supervisory Committee members shall consist of three members who shall meet the qualifications in clause 23.1 (b) above.

The Supervisory Committee shall elect a Chairman, Secretary and Member whose tenure is a three-year term renewable only once. No member of the Board of Directors may be elected to the Supervisory Committee. One member of the committee shall retire every year in rotation.

21:2 ROLES AND RESPONSIBILITIES

i. The Supervisory Committee shall meet at least once every three months, conduct an investigation into the affairs of the society, including an audit of its books and shall make a report thereof, to the next meeting of the Board of Directors. The Supervisory Committee shall also make an annual report to the Annual General Meeting and the Commissioner.

ii. The Supervisory Committee shall, from time to time and not less frequently than once in every three months, cause the statements of account of all members to be compared with the records, of the society and be confirmed to the members. The committee shall maintain a permanent record of all such verifications.

iii. The Supervisory Committee members are jointly and severally liable to the members for the non-performance of their duties, whether resulting from the lack of supervision or negligence in noting illegal transaction/s and unsound fraudulent acts.

iv. The Annual General meeting shall set the minimum qualification standards for members of the Supervisory Committee provided that one of them shall have basic accounting knowledge.

v. The Supervisory Committee shall in particular:- a. Check if standardized accounting systems and procedures are implemented. b. Confirm that cash and bank accounts regularly reconcile with records and make

necessary recommendation s to the Board of Directors. c. Check loan applications and note exceptions. d. Check delinquent loans among Board of Directors, staff and Sacco members. e. Listen to members’ complains and assist them to find solutions.

vi. The Supervisory Committee shall not perform the duties or exercise the powers of the

Board of Directors of the Society. 22.0 PAYMENT TO BOARD AND COMMITTEE MEMBERS No member of the Board of Directors, Supervisory Committee and sub-committees shall receive payment from the society except for the actual costs of travelling and subsistence, sitting allowance and honorarium while working for the society’s business.

23:0 THE CHIEF EXECUTIVE OFFICER (CEO) S/He shall be the Chief Executive Officer (CEO) responsible for the day-to-day Management of the Society. His/her powers and duties shall be assigned by the Board of Directors and in particular:-

i. To manage the affairs of the Society in a competent manner. ii. To cause to be kept proper Books, Records and Registers.

iii. To attend, when called upon, Board of Directors and the General Meetings in an advisory capacity but has no voting rights.

iv. To prepare and analyze on a quarterly basis the Society’s business plan and budget. v. To represent the Society in business transactions and any other transactions authorized by

the Board of Directors. vi. To provide information required by the Supervisory Committee in time.

vii. To propose to the Board of Directors of new positions arising at the Society, and revision of the salary schedule of all Society’s staff.

viii. To implement recommendations set forth in the audit reports and those issued by the Supervisory Committee.

ix. To ensure on monthly basis that the accounting records are in balance and the individual accounts and subsidiaries are up-to-date and that the Income Statement, Balance Sheet and Delinquency List are complete and correct. Ensure that the accounting records are maintained in accordance with the internationally accepted accounting standards.

x. To ensure that adequate insurance is in place for all employees, officials and property of the Society.

xi. To direct and supervise the administration and processing of loans applications. xii. To establish a pricing strategy for products and services, in which the interest rates

structure will balance between the loans available to the members, and the long-term viability of the Society.

For the above purpose, the Manager shall consider:-

(a) Costs particularly those related to members savings, dividends, the allowance for loan

loss, and operating expenses. (b) The need for a strong capital position, which is essential for the Society’s long term

viability and future growth. (c) The competition’s pricing structure, given the competitive nature of the financial market.

Other duties;

i. To assist the Board of Directors with determining acceptable types of collateral that can be used to secure the Society’s loans.

ii. To ensure there is adequate liquidity to meet loan demands, savings withdrawals and operating expenses.

iii. To ensure drawing up and updating of job descriptions of each employee. iv. To ensure implementations without delay of the decisions of all Committees of the

Society and the General Meetings. v. To ensure custody of valuables, legal instruments and the “Common Seal” of the society.

vi. To countersign all Society cheques, contracts and all other accountable documents. vii. To perform such other duties as may from time to time be assigned by the Board of

Directors.

24.0 BOOKS OF RECORDS The Society shall keep up-to-date and in a proper businesslike manner such accounts and such books as the Rules and the Commissioner may from time to time direct, and in particular shall keep the following books of accounts:-

(a) Register of members showing in respect of each member: i. The name, age, date of application for membership, address and occupation.

ii. The date s/he was admitted to membership, and iii. The date on which s/he ceased to be a member

(b) A minute book giving details of proceedings at General Meetings. (c) Minute book giving details of proceedings of the Board of Directors Meetings. (d) A cash book showing the details of all monies received and all monies expended or paid

out by the society. (e) General ledgers containing such accounts as are necessary to reflect properly the business

of the society. (f) A personal ledger for each member showing his/her transactions with the society. (g) Assets (property) register. (h) A register of loans to members showing in respect of each loan, the loan number of the

borrower, the due date of repayments and the date repayments were completed. (i) Such other books and records as the Board of Directors may decide or that the

Commissioner may prescribe.

25.0 AVAILING OF BOOKS AND RECORDS All books and other records shall at all times be available to all Board of Directors members of the society, Supervisory Committee members, the auditor, and the Commissioner or his authorized representative. A copy of the Co-operative Society’s Act, the Co-operative Societies Rules, the society’s registrations certificate, these By-laws and a list of members excluding details of nominees and deposits holdings or loans shall be available for inspection by any member. 26.0 AUDITING

i. A qualified auditor shall be appointed by the General Meeting from a list of auditors approved by the Commissioner who shall audit the books and all accounts of the Society for the ensuing year and report to the next General Meeting on the manner the records were kept, the liquidity position, the position of the assets in relation to the liabilities, the manner in which the members deposits and deposits are invested and the overall results from the operations of the Society and generally the standard of accounting employed during the year under review.

ii. The auditor shall have the right to access all accounting records and all the books kept by the Society and such information pertaining thereto which s/he has reason to believe will give necessary perspective for him or her to form such opinion that s/he may report to the members in respect of issues stated above.

iii. The auditor shall at all times have the right to attend any General Meeting of the Society, receive all notices and any other communications relating to any General Meeting as is

entitled to members and delegates of the Society and to be heard at such meeting on any agenda which concerns him/her as an auditor.

iv. The audited accounts for each financial year shall be submitted to the Commissioner for registration before presentations to the General Meeting within four months after the end of each financial year.

v. The audited accounts may be sent to every member and shall be displayed conspicuously for the members’ information at the Head Office and all Branch Offices of the Society at least two weeks before presentation to the General Meeting.

27.0 FINANCIAL YEAR The financial year of the society shall be the same as the calendar year, i.e. 1st January to 31st December. 28.0 AUTHORISATION TO SIGN DOCUMENTS Unless declared otherwise by the General Meeting, all documents, contracts and cheques shall be signed on behalf of the Society by the Chairman, Vice-Chairman, Treasurer, Secretary and be countersigned by the Manager and such other member of officer of the society as the Board of Directors may elect. 29:0 DISPOSAL OF SURPLUS Subject to the Act, and approval of the General Meeting, the net surplus resulting from each operational year shall be disposed off as follows:-

a. Not less than 20% shall be credited to the reserve fund; b. The balance may be disposed off as decided by the General Meeting for:-

i. Paying a dividend on deposits at a rate decided by the General Meeting. ii. Paying interest or refund to members on record at the close of the financial year in

proportion to the interest paid by them during the financial year. iii. Being carried forward to an education fund or any other fund or funds of the society,

including the appropriation account. iv. Paying a gratuity or honorarium to the Board of Directors, Supervisory Committee,

retiring officers or bonuses to employees of the society. v. After making the required allocation as to the reserve fund, applying an amount to

be decided by the General Meeting to any community or charity purpose. 30.0 COMMON SEAL The Society may adopt and use a common seal. The seal may be a rubber stamp bearing the words “Good Faith Sacco Society Ltd” and shall be different from the ordinary name-stamp of the Society. The seal shall be kept securely under lock and key by the Manager and shall be used only by, and in the presence of, the Executive Officers or other members of the Board of Directors authorized to sign documents on behalf of the society. 31:0 FINES All fines shall be determined by the Board of Directors subject to approval by the Annual General Meeting.

32:0 DISPUTES Any dispute arising out of these By-laws or concerning the business of the society, which cannot be settled amicably by the Board of Directors or the General Meeting, shall be referred to the Co-operative Tribunal. 33:0 CONFIDENTIALITY BY OFFICERS OF SOCIETY The members of the Board of Directors, Supervisory Committee, members of Sub-Committees and Employees of the society shall hold in the strictest confidence all transactions of the society with its members, and all information respecting their personal affairs except to the extent deemed necessary by the Board of Directors in connection with the making of loans and collection thereof. 34:0 PECUNIARY INTERESTS No Board of Directors member, Supervisory Committee member or Employee of the society shall in any manner participate in the deliberations upon or determination of any question affecting his/her own financial interest. In the event of disqualification of any such committee member or employee, he/she shall withdraw from such deliberation or determination, and the remaining qualified committee members present at the meeting, if constituting a quorum without the disqualified person, may exercise with respect to the matter, all the powers of the Committee. 35:0 ACQUISITIONS OF BY-LAWS A copy of these By-laws shall be furnished to every member on request on payment of a fee not exceeding its actual cost to the Society as determined by the Board of Directors. 36:0 DISSOLUTION The Society may be dissolved in accordance with the procedures set forth in the Co-operative Societies Act, the Co-operative Societies Rules and these By-laws. 37:0 AMENDMENTS OF BY-LAWS These By-laws shall not be amended except by a General Meeting of the Society in accordance with the Act and Rules and no amendment shall become effective until it is registered by the Commissioner. 38:0 ACCEPTANCES OF THESE BY-LAWS

(a) These By-laws of the Society stand accepted by Good Faith Sacco which was registered in October 2001 (refer to page 9 above)

(b) They were submitted to the Commissioner for his approval following action on issues that he had pointed out.

ACCEPTED AND CONFIRMED BY NAME DESIGNATION 1)……………………………… ………………………………... 2)……………………………… ………………………………... 3)……………………………… ……………………………….. COMPANY SEAL ……………………………

good faithgoodfaithsacco.co.ke/wp-content/uploads/2014/11/by-laws... · 2019. 1. 7. · page 1 good...

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