Top Up Loan Particulars
- This is an additional amount of loan advanced to a member with an existing normal loan.
- It has an interest rate of 1.1% and should be repayed in 36 -48 months for amounts less than a million and up to 60 months for amounts larger than a million.
- Part of the top up loan offsets the existing normal loan balance in full and then the remaining amount of top up loan is paid out to the member.
- This is effected after a formal application of the new loan with new guarantors and due appraisal.
- A refinancing commission of 5% on the outstanding principal shall be recovered from the new loan before disbursement.
Loan Borrowing Regulations
- A member must have contributed a minimum share capital of Kshs.12,000
- A member must be at least 3 months old
- Lumpsum contribution can be considered in loan appraisal after three months in regard to their payment or pay a 5% fine for them to mature immediately
- All loans must be repaid monthly by the 10th of the following month.
- A member is entitled to one or more law types, all running at the same time
- A member cannot have more than one loans of the same type all running at the same time
- Pledge of future earnings which can include terminal benefits
- If a member for any reason does not have guarantors and decides to self-guarantee, their deposits should be equal or more than the loan requested.
- When aggregated, all loans applied for and those ongoing, the amount shall not exceed the member's deposits times three at any given time.
- If a member clears the loan balance by cash, and immediately applies for the same type of loan or any other loan within 30-days of clearing the balance, this shall also be considered as refinancing and shall attract 5% penalty. However, there will be exceptions for this provision given the reasons prevailing and upon approval by the credit committee to forego this clause.
Loan Guarantees
- Unless the loan applied for is equal to or less than the member’s deposits it must be secured by guarantors or other acceptable collateral.
- Unless allowed by the Credit Committee through appraisal, no member shall be allowed to guarantee more than four loans at any given time.
- Members of the Board of Directors, Supervisory committee and staff shall not guarantee any loans.
- Guarantors must be members of the society.
- The obligation of the previous guarantors shall cease upon change of guarantors and subject to the new guarantor being accepted by the society.
- A members’ deposits pledged as security for other members’ loan shall not be surrendered to off-set his/her own outstanding loan, unless the former can provide an alternative security for the latter’s loan or replaced with a new guarantor.
- Loan recovery (from applicant or from guarantor) can be done through regular payment as per agreement (deposits, payroll deduction) or from the deposits of applicant and guarantors.