REQUIREMENTS FOR MICRO-CREDIT PRODUCTS
1. Requirements for group formation
- One must be over 18 years of age
- One must be carrying on a legal small and medium business recognized by law
- At least 5 to 15 members
- One must have not been involved in criminal activities
- Election of interim officials to oversee the operations of the group and these comprise chairperson, secretary and treasurer
- A training must be done by the Saccomicro-credit staff to the members and other potential members
2. Group registration process
- Once a group has been formed, registration process must be accompanied by the following:
- The group by-laws to be followed
- The minutes from the meeting held indicating that the members resolved to open an account with the Sacco and in the same minutes the group must indicate the objectives to be in line with the business carried on
- The photocopies of the group interim officials identity cards
- A list of all members
- Registration certificate from the ministry of culture and social services and it should be updated one
- And introductory letter from the same ministry to Imarisha Sacco
- A group registration number is given to the group and a payment of ksh.300 as membership fee
- A group opens an account and is given a card indicating their account number
3. Requirements for group loans
- The group once registered, for it to qualify for loans, it must meet the following:
- A training must be done on various loan products to the group members
- The group members must have saved with the Sacco for at least eight (8) months(a must)
- The savings amount must have been ksh.500 per week
- The group members must be having continuing small and medium enterprises and not for start-up so as to be able to repay the loans at the agreed period which is normally one year or twelve (12) months
- Interest rate is 1.17% per month flat rate
- Insurance fee is 2% recovered upfront from loan approved
- One(1) % processing fee recovered upfront from loan approved
- A visit to the group area of businesses must be done to establish the existence of the business and whether they are operational and also to know their area of residence
- Loan forms must be filled in all respects by the loanees and signed by the group officials indicating the amount applied and the application dates
- Photocopies of all group members identity cards together with the photocopies of the witnesses and guarantors ID must be attached to the loan forms
- A list of all members must also be attached having appended their signatures and date signed
- The loan forms must have guarantors since it is group guarantee
- The affidavit must be signed by the commissioner of oaths and the loanees themselves and the dates signed indicated
- The business assessment forms must be attached for all the loan forms
- Schedule of properties/assets must be attached and approved by the group officials and also signed by the guarantor and the commissioner for oaths.
4. Requirements for individual loans
- An individual loan form must be filled in all respects by the loanees
- Business Certificate of registration must be provided
- Must provide at least two(2) guarantors and a witness
- An affidavit must be sworn and dully signed by all parties
- A schedule of assets/properties must be provided and signed by the commissioner for oaths
- Business assessment form must be attached
- An individual loanee must have an account with the Sacco
- Must have saved with the Sacco for at least six(6) months in a consistent manner
- Must provide a bank statement from another financial institution to provide a proof of an existing obligation if any covering at least six months.
- An interest of 1.17% per month is charged on a flat rate basis but subject to review from time to time
- One(1)% processing fee is charged upfront which is subject for review from time to time
- Two (2) % insurance fee is charged upfront which is subject for review from time to time.
5. Loan securities and the procedure for them
- For group loans ,securities are group guarantors, savings held in the group accountwhich must be consistentand collaterals like household goods such as televisions,cupboards,fridges,wardrobes and wall units etc
- Chattels such as animals like cows,goats,sheep etc
- An affidavit sworn in and signed by the commissioner of oaths
- The loan form must be signed by the area chief
- For individual loans, they must fulfill the following:
LOG BOOK PERFECTION PROCEDURE SHOULD BE DONE
Documents for Logbook Perfection
- Original valuation report
- The chattels form fully registered.
- Original logbook
- Signed but blank transfer form.
- Copy of PIN number.
- Copy of identity card.
- Copy of insurance (comprehensive cover).
- Letter from insurance confirming Sacco interest endorsement in the cover.
- Certificate of installation of anti theft device.
- Copy of records from KRA
TITLE DEED PERFECTION PROCEDURE SHOULD BE DONE
Documents for Title deed Perfection
- Original Title deed
- Duly executed transfer forms in triplicate (must be sealed if a company is selling)
- Photos of the owner if it’s an individual and if a company, then 3 photos each of 2 directors of the company
- Copy of Pin Number of the owner
- Copy of National ID of the owner and if a company copies of National IDs for 2 directors who’ll sign the transfer forms.
- Bank statement from other financial institutions to prove their financial obligation with them if any for at least 2 years
- Savings must be consistent for at least six months with the Sacco
- A schedule of assets/properties must be provided and must be registered with the registrar of companies
- At least two guarantors and a witness
- An affidavit must sworn in and signed by the commissioner of oaths
- Certificate of registration of the business
- Chattels must be provided and registered with the registrar of companies
6. Chattels should be registered and a member must fill a chattels mortgage document.
7. Chattels are specific hence need to provide details on Serial numbers, color, make/model etc.
8. A Sacco by help of an auctioneer can develop a chattels valuation guideline.
- Micro-Credit group loans are given on levels ksh.20, 000 as the maximum on the first level but no minimum the next level is ksh.40, 000 etc.
- Repayment period is twelve (12) months to twenty(36) months maximum
- For individual loans, the eligibility will be assessed based on the securities given and the ability to pay after assessment of the business. The assessment of the business will be done before loan is given and after to establish reality of the existence of securities given. A minimum of ksh.50,000 will be loaned and repayment monitored after which the second is given
- Loan application process
- Loan forms are given to the groups which qualify after training them
- Loan forms handed in by the group officials having been filled by the loanees in all respects and signed by the group officials
- Once this is done micro-credit officers will look at them and check to make sure that there are no errors and that everything has been done correctly
- All the attachments must have adhered to such as affidavit sworn ,schedule of assets/properties provided, business assessment form all approved and signed by the concerned parties
- Appraisal is done on all forms and Loan schedule is produced and forwarded to the Audit department for verification.
- Once the auditors are through without any queries, the forms are forwarded to the relevant offices for approval
- Once approval has been done by either Senior Finance Manager or Deputy CEO,the forms are taken back to the Micro-Credit department for payment
- Group officials are then informed to collect the money and distribute to their members
N/B The money is credited to the group account in the Sacco
- Group officials are given loan schedule showing the amount approved and paid, monthly installment and the due date of payment.
- After which repayment is monitored to make sure that they comply with the dates set
Micro-Credit /Finance products
- Savings products-features/characteristics/requirements
- Savings must be done either daily, weekly or monthly
- • Ksh.500 is saved per week for 8 weeks or ksh.100 per day for 5 days
- • Saving culture is enhanced and in this way we get to know the background of the groups. This is done through training
- Credit products
- • Maximum of ksh.20,000 for the first level per each group member
- • Interest rate of 1.17% per month
- • 1% processing fee charged upfrontfrom the loan approved
- • 2% insurance fee charged upfront from the loan approved.
- • Repayment period between 12 months and 24 months maximum