LENDING POLICIES

LENDING POLICY

  • NORMAL LOANS
  • Normal loans lending rate to be retained at 3 times of the deposits held.
  • First normal loan to members to be retained at 3.5 times member’s deposits.

NB: This does not include members rejoining or those joining from other Saccos.

  • Repayment period for normal loans to remain 60 months.
  • Maximum normal loan to remain Kshs. 6 million.

 Maximum of total loans should not exceed 3 times member’s deposits at any time, including special loans.

  • EMERGENCY LOANS
  • All emergency loans will be granted subject to member's ability to pay and 3 times shares/deposits limit.
  • Repayment period for emergency loans to remain12 months.

  NOTE: Documentary evidence is not required on emergency loans.

  • COLLEGE/UNIVERSITY AND SCHOOL FEES LOANS

(a) NURSERY TO SECONDARY SCHOOL

  • Maximum amount to remain at Kshs. 200,000 per member per year.
  • Repayment period nursery and secondary school fees loan to remain12 months.
  • Members to qualify for additional loans provided total for the 12 months (from the date the loan is granted) does not exceed Kshs. 200,000.  

(b) COLLEGE AND UNIVERSITY

  • Maximum amount to remain Kshs. 500,000.00 per member per year.
  • Repayment period to remain 12 months.
  • NOTE: No documentary support required for Nursery/Secondary/College and university loans.
  • SPECIAL LOAN
  • Special loan will be based on 3 times total shares/deposits but will not have limitations on 1/3rd provision so long as one opens an account in FOSA through which repayments  of the loan will be channelled. 
  • Maximum amount to remain Kshs. 400,000.00.
  • Repayment period to remain 24 months.
  • Interest charged to remain 3% on reducing balance basis.
  • Total interest payable to however be calculated and paid in equal instalments over the loan’s repayment period.
  • The special loan product will be transferred to FOSA w.e.f 1st July 2012.

(v) TOP- UP NORMAL LOANS

  • Commission to continue to be charged to any member who requires a normal loan but is not able to clear the outstanding loan in cash.
  • The commission to remain 10% of the total loans outstanding.
  • The outstanding loan(s) and commission will be deducted from the total loan requested. 
  • The request must be done in writing.

  (vi) NORMAL LOAN AFTER CASH PAYMENT

  • Members who clear their outstanding normal loans by cash and apply for a new normal loan before the stipulated waiting period of 3 months will be required to pay a 5% commission on outstanding normal loan balance cleared in cash. 

 NB: Commission due on (v) and (vi) above may be paid in cash or deducted from the loan requested according to the member’s wish.
 NOTE: INTEREST ON LOANS
Interest on all loans except Special loans will be charged monthly at 1% of the loan outstanding on a reducing balance basis.