MC loans are given to small-scale economically active low-income groups and business people. Such loans shall be secured by Co-guarantor ship and the group members shall have a common bond (interest) and must have income generating projects. Micro-credit shall operate independently from all activities of FOSA and BOSA. However, MC affairs shall be dealt with by the investment/micro credit Committee of the SACCO.
Eligibility for loan
All Micro credit customers are eligible to apply for a loan provided that:-
- An initial period of 8 weeks of uninterrupted savings and training has been completed.
- All meetings over the period have been attended by the members and the MC field officers to supervise savings collections and prepare members to familiarize with the loaning procedures.
- Members comply with the SACCO regulations and their respective group by-laws.
- The loan disbursement criteria shall be on 1:1:1: ratio i.e. 1/3 of the members to receive loan after 8 weeks and the subsequent 1/3 of the members to get loan after 4 weeks respectively.
- Subsequent loaning of the 2nd and 3rd lots is dependent on the repayment record of the 1st borrowers.
- The purpose for the loan shall be business financing (working capital).
Phases of Micro credit Loans
PHASE | LOAN AMOUNT (KSHS) | SHARES/SAVINGS (X) | REPAYMENT PERIOD (MONTHS) | WEEKLY SAVINGS (KSHS) |
1 | 5000-30,000 | 5 | 12 | 100 |
2 | 31,000-50,000 | 5 | 12 | 150 |
3 | 51,000-75,000 | 4 | 12 | 200 |
4 | 75,000-100,000 | 4 | 12 | 300 |
5 | 101,000-250,0000 | 3 | 18 | 500 |