The Cooperative shall grant loan requests made to it SUBJECT ONLY to availability of funds and such loans shall be granted for such purposes, which in the opinion of the Management Committee and the Credit Committee are productive or necessary, and in the best interest of the borrower.
Persons Entitled to Loans
- a. Member of the Society whose;
- Membership is more than 6 (six) months except in the case of transfer of an existing loan of a past member to his nominee or other successor in interest;
- Contributions are regular and steady
- Previous loans from the Society has been fully paid off; and
- Who has fulfilled any other condition as may be prescribed by the Bye Laws and the management committee.
- b. Non-members of the Society who have complied with all;
- The conditions prescribed by the Bye Laws;
- The Management Committee; and
- The Credit Committee.
Procedures & Rules Guiding Loans Application
- Persons who intend to apply for a loan shall write an application addressed to the Management Committee who shall then pass same to the Credit Committee for recommendation.
- Final approval/refusal on the loan agreement shall reside in the Management Committee
- Persons whose loan applications have been approved must duly execute a loan agreement with the Society which shall also be duly executed and acknowledged by the Management Committee.
- No loan repayment period shall exceed 18 months except or as directed by the management committee.
- The foregoing procedures shall be in accordance with the provisions of the Bye Laws and where there is a conflict between both documents, the provisions of the Bye Laws shall prevail.
The Society shall be entitled to charge accruing interest on approved loans at a rate to be fixed by the Management Committee and communicated to the borrowing member. In case of default in repayment, penal interest rate shall be applicable pursuant to the provisions of the Bye Laws.
Maximum Credit Limit
- Active Members: The maximum credit limit of each applicant requesting for a loan shall be determined as 150% of the total savings of a prospective applicant as at the time of such application. This however is subject to maximum credit limit as approved by the General Meeting, availability of funds, the principle of making credit available to as many members as are qualified and the securities offered.
- Retired Members: The maximum credit limit of each applicant for a loan shall not exceed the member’s ordinary savings. In exceptional cases adequate security shall be provided for any loan above the member’s ordinary savings.
This policy shall bind all loan applications addressed to the Society without exceptions.
Loan Application Procedure
- The borrower sends a mail to the cooperative manager stating the details of the borrower and the reason for borrowing (This helps to process the loan, in due time).
- A loan application form shall be sent by the cooperative manager to the borrower.
- The borrower must fill the loan application form sent by the cooperative manager.
- The cooperative manager shall liaise with the HR department on the borrowers’ company status and eligibility for the amount requested.
- If the loan is approved by the HR department, the cooperative manager shall prepare a loan agreement and sent to the borrower.
- The loan application form shall be submitted by the Cooperative Manager to the Credit Committee.
- The credit committee shall meet and decide on the loan request.
- If the loan is not approved, the cooperative manager shall communicate with the borrower on the reason his/her loan was not approved.
- If the loan is approved, the credit committee shall document that the loan has been authorised.
- The borrower shall fill the loan agreement send by the cooperative manager.
- The borrower shall sign off on all pages of the agreement to show he/she has duly read all pages of the document especially the repayment schedule.
- A signed agreement shall be circulated amongst the credit committee for their scrutiny and signature on the loan agreement.
- The loan shall then be disbursed after all processes have been completed.