MICRO-CREDIT Products

Micro-Credit

This product is tailored to suit the needs of investment groups of 10-25 members and registered with the ministry of Culture and Social services.

  1. Chama Loan

This is a loan advanced to groups, Reputable Institutions and churches with a maximum repayment period of 2 years (24 months).
• They must have operated a deposit account for at least six months.
• The minimum Monthly contribution is Kshs. 5,000/-
• They must hold an active Pamoja Account.

Appraisal of Chama Loan
• Should have consistently saved deposits with the Sacco for at least six months.
• Discipline of member savings will be paramount.
• Loan shall be three times (3) of the deposits.
• Group/Institutions should provide certified minutes of intent to borrow duly signed by the full committee
• Fully filled loan form
• Loan interest shall be 1.209% per month on reducing balance Security
• The Loan shall be secured by Group Deposits.
• If the group is formed by the members of the Sacco, individual members can guarantee the group loan by their individual shares.
• The Loan shall be secured by legally charging group properties and individual properties of directors/ group members. These properties may include Land (title deeds), log books etc. in case of log books the vehicle charged should not exceed 12 years from the date of the manufacture.
• The loan amount approved shall be 70% of the value of collateral provided. This collateral may be valued by the society valuer at the cost of the borrower.

 

Disbursement
The loan shall be released after all the documents are verified and the group has agreed to the loan policy.

 

 

 

  1. Micro-Credit Loans

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:-
1. An initial period of 8 weeks of uninterrupted savings and training has been completed.
2. 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.
3. Members comply with the SACCO regulations and their respective group by-laws.
4. 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.
5. Subsequent loaning of the 2nd and 3rd lots is dependent on the repayment record of the 1st borrowers.
6. The purpose for the loan shall be business financing (working capital).

Phases of Micro credit Loans

  1. Bodah Operators Loan Products

This is loans given to a group of people who are organized and carry out the business of bodah and are members of Trans Nation Sacco ltd. The group must be in a group of 10 and above and registered under ministry of social service and culture.

At any particular time there must not be more than 2/3 members with loan. The group also must maintain group shares saved on monthly bases at least ksh.200 per member. These TN Sacco Products shares will be acting as security of individual loans in addition to the guarantors. All the members in the group will acts and deemed as a guarantor of the loan given to a member of that group.

This is a loan given to a group of people who are organized and carry out the business of bodah and are members of Trans nation Sacco ltd. The group must have 10 and above members and must be registered under ministry of social service and culture.

At any particular time there must not be more than 2/3 members with loan. The group also must maintain group shares saved on monthly bases at least ksh 200 per member. These TN Sacco Products shares will be acting as security of individual loans in addition to the guarantors. All the members in the group will act and are deemed as guarantors of the loan given to a member of that group.

Both individual and group shares will earn dividend at the same rate of BOSA member’s shares.

Requirement
• One must have saved for at least 3 months.
• Loan is 4 times one shares
• Interest rate is 1.209% per month constant
• Loan repayable in a maximum of 12 months

 

Other attributes
The bodah will be co-owned with the Sacco.
Comprehensive insurance for one year and the cost is absolved by the member. The member will identify the bodah and the Sacco will pay to the supplier directly.
For the old members the ability to pay the loan will be determined by one bank statement in the Sacco.
New member will be introduced by the group for the first loan.