The Society shall give loans and advances of tenors of up to 60 months or such other tenor as may be determined by the BOD. The amount granted to any one individual will range from 1000 to 10% of core capital or as may be determined by the board of directors from time to time. The following loans are available but their names and attributes are subject to review by the Board of Directors in accordance with the provisions of this policy.

The Society shall give loans and advances of tenors of up to 60 months or such other tenor as may be determined by the BOD. The amount granted to any one individual will range from 1000 to 10% of core capital or as may be determined by the board of directors from time to time. The following loans are available but their names and attributes are subject to review by the Board of Directors in accordance with the provisions of this policy.

New member introductory loan

This loan enables SACCO new and rejoining access loan immediately their first share contribution is realized without having to wait for six months. The terms of this product are as follows:

  • The new members can be granted a loan immediately the one month share/savings contribution is realized.
  • A quater of the approved loan shall be retained as savings

Normal loan

  • These are loan for development purposes and form the bulk of our loan applications.
  • Application must be registered in the society offices on or before 10th of every month.
  • Repayable within a period not exceeding 36 months

Development loan

  • These are loan for development purposes and form the bulk of our loan applications.
  • Application must be registered in the society offices on or before 10th of every month.
  • Repayable within a period not exceeding 48 months.

Investment loan

  • Loan multiplier X 3 the savings held
  • Repayment period 60 months
  • Repayment method – Through check off system or standing order in case of retirees.
  • Interest charged is 1.5% on reducing balance

School fees loan

May be granted to a member even though he has an outstanding loan on the following conditions:

  • The total of all outstanding loan, including school fees must never exceed three times a member’s shares and deposits.
  • Only once school fees loan may be granted in one calendar year
  • School fees cheques shall be made directly to school
  • Repayable within 12 months.

Emergency loan

Emergency includes;
  • Sudden hospitalization, out patient treatment
  • Funeral expenses, court fines, theft and other unforeseen circumstances
  • Repayable within 12 months
  • Will be given within a member’s loan entitlement
  • One must produce documentary evidence
  • Emergency loan are granted daily
  • Cheques drawn in favour of the claimant/hospital

Refinancing/Top up loan

  • This is additional loan to a normal/investment and development loan in a case where a member is unable to finalise a project within the loan earlier taken.
  • Must be repaid within the remaining repayment period of the original loan.
  • At least 70% of loan must be paid if not 10% top up fee will be applied.

College fees loan

  • May be granted to college and university students .
  • May be granted to a member even though he has an outstanding loan on the following conditions.
  • The total of all outstanding loans, including college fees must never exceed three times a member’s shares and deposits.
  • Only once college fees loan may be granted in two calendar year
  • Repayable within 24 months

Instant loan (FOA Flex)

  • It is repayable in a minimum of 3 months and maximum 12 months
  • Minimum – Kshs 3,000 and Maximum-Kshs. 1,000,000
  • Processed within a day
  • Interest rate is 5% per month on a straight line basis.
  • Cannot be repurchased by long-term loans except FOA Flex itself.

Loan repurchases

  • It gives a member an opportunity to secure a big loan and to consolidate all the old loan into one.
  • Commission of 2.5% on the loan applied
  • The new loan falls under the normal term applicable to all loan.
  • The new loan operates on fresh terms and conditions, i.e period and month payable.
  • A member will be eligible to purchase a loan after 12 months of the previous loan.

Illustration

  • Shares and deposits – Kshs. 200,000
  • Loan balance at that point - Kshs. 100,000
  • Loan applied at this point -Kshs.600,000
  • Commission on purchases –2. 5% of 600,000 = 15,000
  • Maximum entitlement 200,000 x 3 = 600,000
  • Less loan balance and commission 115,000
  • Amount paid to the member 485,000
  • Amount due to the society is Kshs. 600,000 which is repayable within a period not exceeding 48 months at interest rate of 1.5% per month on reducing balance basis.

Insurance premium finance loan

This loan is for the purpose of paying insurance premium
a) The loan amount will be equivalent to the actual insurance requirement subject to ability to repay.
b) The loan must be sufficiently guaranteed
c) Interest rate shall be 2% per month on declining balance
d) Repayment period shall be 12 months

Ngarisha Homecare Loan

This loan enables members to acquire products like Tanks, mattresses, laptops, bicycles scooters, fridge cookers TVs etc.
a) Maximum loan kshs 100,000 subject to the ability to repay.
b) Interest rate shall be 1.5% p.m. on declining balance
c) Repayment period shall be 36 months
d) Security will be 4 guarantors or collateral

Biashara Loan

This loan shall be granted to business people who bank their business income regularly
a) Maximum loan kshs 1,000,000 subject to the ability to repay.
b) Interest rate shall be 1.5% p.m. on declining balance
c) Repayment period shall be 36 months
d) Security will be 4 guarantors or collateral

Conditions for borrowing

  • A member must have completed at least six months of membership and contributed not less than 6,000 in shares and deposits
  • A member who withdraws his deposits from the society and rejoins will be treated as a new member for the purpose of this loan policy.
  • A member must have made a monthly contribution consistently for six months to qualify for a loan.
  • Savings contributions paid in lump sum for the purpose of securing a loan from the society can be considered only if such money remains in the society for at least six months.
  • A member applying for a loan should undertake to pledge future salary income from current or future employer(s) towards loan repayment before such a loan is granted by the society.

General requirements

  • Savings period – 1 month/ new member introductory loan
  • Boosting of savings by cash 3 months period to qualify for loan
  • Attach to loan form one latest payslip and ID copy
  • Salary commitment – 2/3 of Gross salary to cover all SACCO deductions.
  • Security for loan – savings, guarantors and future salary
  • Guarantors pledge / coverage totals be 100% of loan applied
  • Loan consideration and disbursement monthly.

Loan application forms must include:

  • Amount paid
  • Purpose of the loan
  • Term of repayment
  • Type of security given
  • Fully completed and supported with ID
  • Certified current pay slip for salaried employees
  • Certified bank statement for members in self employment
  • A statement of income for members in self employment

2/3 Rule

  • A member will be required to maintain a monthly deposits contribution of not less than 2/3 of his monthly contributions made prior to his/her loan acquisition for at least six months before any variation can be effected.

Lump sum loan repayment

  • A member who makes a lump sum loan repayment will have to wait for a period of 3 months before borrowing a new loan.

Interest rate

The rate of interest on all loan shall be 1.5% per month on a reducing basis until the same is changed, except insurance premium finance loan which is 2% on reducing basis and Instant (FOA Flex)loan which is charged at 5% per month on straight line basis.

Order of loan processing

  • Loan applications are considered in the order of receipt.
  • Provided that, where there are more applicants for loan than funds available; preference will be given, in all cases, from the smallest in ascending order.
  • If amounts requested are approximately the same, preference will be given in the following order;
    • Members who have never taken loan
    • New members who have just qualified for loan
    • Members who have cleared their first loan applied for fresh loan.

Loan repayment

  1. The repayment period shall be determined by the management committee but in all cases shall note exceed 60 months
  2. Deductions for loan repayments shall commence note later that the following months after loan disbursement
  3. A member will be required to repay the loan within the time specified on the application form.
  4. loan will be repaid from a member’s salary/earning and no member should be allowed to suffer total deductions including saving, loan repayment and interest in excess of two thirds of his/ her monthly basic salary. Nothing in the foregoing need prevent any member from repaying his/her loan interest in whole or in part, prior to its maturity.
  5. Basic salary excludes rental house allowance, owner occupier house.
  6. For members not in full time employment they shall be required to show proof that they are capable of repaying the loan by giving a statement of their income for the past six months.
  7. Allowance will be considered only on reproduction of writing advice by the employer and to extent that the allowance is in excess of monthly mortgage, if any.
  8. While a member is allowed to repay the loan from other sources beside the individual salary, under no circumstance should these source be taken into account in determining the member’s ability to repay the loan at the time of granting the loan.

Other security

  • Pledge in form of securities like share certificates, logbooks
  • Up to 50% of the surrender value in the case of life insurance covers.

Log books pledges by third parties

The society will expect the following;

  • Endorsement letter
  • Identification card (ID) of the owner
  • Certificate of registrations in case of a registered legal entity
  • Pin cards both the endorser and the applicant
  • ID cards for both endorser and applicant
  • The valuation of the car and legal fees shall be paid by the loan applicant

Valuation reports

Society will only accept valuation reports from the Automobile Association of Kenya or any other firms of repute that may be approved by the management Committee, when dealing motor vehicle log books.

Risk management on loan

  • Members encouraged repaying their loan regularly for eligibility benefits that would accrue to the beneficiary in the event of death.
  • The cover demands up to date member's account. Any underpayment within the period will be deducted from the deposits.
  • The loan will be fully paid by insurance in case of death of a member.
  • A free rider of Ksh 100,000 will be paid for funeral arrangements in case of death of a member who has a running loan.

Defaulters

If a member fails to make periodical loan repayments to the society as stipulated,
He/she shall be:

  • Informed immediately in writing in the first month
  • Second month the guarantor shall be notifies
  • After three months the entire loan becomes repayable and the guarantors are attached.
  • The Sacco has engaged a debt collector and members should use the debt collector to recover unpaid loan from defaulting member they guaranteed.

Penalty charges

Penalty charge of 20% of the loan repayment amount per month shall be levied and added to member’s loan repayment remittance are not received by the 10th day of the following month.

Monthly contributions

  • Deposit and loan repayment shall be done either through check off, standing order, direct debit instructions or any other method the management committee may approve.
  • Unless the loan applied for is equal to or less than a member's deposits, it must be secured by guarantors the total deposits of the borrower and those of the guarantors must be equal to or more than the loan applied for.
  • No member will be allowed to guarantee more than three loan.
  • Members of the management committee/ Supervisory Committee and UNIPHARMA SACCO employees shall not guarantee loan among themselves.
  • The obligation of the previous guarantors shall cease upon change of guarantors but subject to new guarantors being accepted by the society.
  • The obligation of the guarantors shall also cease when loan guaranteed have been reduced to or lee than the members deposits
  • The society shall maintain a record of all guarantors to every loan.
  • The information on eligibility to guarantee shall only be disclosed to the intending Guarantor.

Withdrawals

  • Where a member wishes to withdraw his / her deposits or transfer the membership from the society, he/she will be required to give the society a written notice of up to 60 days his/ her intention to withdraw the same.
  • No member shall be allowed to withdraw his/ her deposits or transfer his membership from the society unless the member’s loan is repaid in full or then loan balance can be fully be offset by the members deposits and all loans guaranteed are cleared.

Requirements to join

  • New members’ registration fees of Ksh. 1000/=
  • Share capital 1000/=
  • Copy of National Identification card.
  • Copy of current payslip
  • Filling of New members form
  • Minimum shares/ savings contribution is 5% of gross salary or Ksh.1000/= whichever is higher.
  • Filling next of kin form (Nominee card)

Part Withdrawals

No one will be allowed to withdraw part of his /her deposits or offset part of the deposits against an outstanding loan unless he /she ceases to be a member.

Unipharma Sacco has a wide range of savings products. These products are tailored to meet various needs of diversified membership with each member’s unique need being catered for in these array of products and services.

Shares or Equity Capital

  • Minimum shareholding – 50 shares per member of Kshs. 20
  • Not withdrawable but transferable
  • Members earns dividends on shares
  • Shares not refundable or assignable as collateral for loan

Treatment of shares on withdrawal of deposits

  • Member not eligible for loan until resumption of deposit for next six months
  • Members may transfer the shares to another member.
  • Not withdrawable but transferable
  • Members earns dividends on shares

Treatment of shares on loan processing

  • They rank in determining the maximum loan entitlement.
  • Excluded in determining security to the loan

Example
A member with a deposit of Kshs. 60,000 and shares of Kshs 1000 will be awarded a loan on the following basis: Entitlement: Kshs. 60,000 x 3 = 180,000.

Security to the loan:
Deposit of Kshs. 60,000 plus other members or alternative guarantees
Note the exclusion of Kshs. 1,000 from the overall security

Loan share banding table.

With effect from 1st February 2014 the management varied. The deposits contributions as follows

loan AMOUNT(Ksh)UPTO 36 MONTHS Minimum Contribution(Ksh)BEYOND 36 MONTHS Minimum Contribution(Kshs)
Up to 500,000 1000 3,000
500001 to 1,000,000 1,000 6,000
1,000,001 to 1,500,000 2500 10,000
1,500,001 to 2000,000 5,000 15,000
2,000,000 to 3,000,000 10,000 20,000
3,000,000 to 4,000,000 15,000 25,000
4,000,000 to 8,000,000 20,0000 30,000

Deposit Accounts

These deposits may be used as collateral against borrowings from the Society and shall only be refunded when a member withdraws from membership and provided the member has fully repaid all his debts and is free from guarantee. Deposits may however be transferable from one deposit account to another provided the transaction does not contravene the Savings policy.

Non-withdrawable deposits shall be contributed on a monthly basis or at such prescribed periods and in such amounts as may be prescribed in this policy. Non-withdrawable deposits shall be refundable within sixty days after receiving a written notification from the member. Interest on deposits shall be paid at a rate that shall be determined by the board at the end of the year after audit has been completed. The interest may be eliminated if the financial position of the Society and capital adequacy does not permit payment.

The society shall operate the following accounts as non-withdrawable deposits:

1. Plot Buying

This is a scheme that is administered through Unipharma Sacco. This will facilitate plot buying for members who are interested

2. Bossa Deposits

  • Minimum monthly contribution of Kshs. 1,000 or 5% of one’s basic salary whichever is higher
  • Consistency in contribution must be adhered to
  • Earn interest as determined by the management committee
  • Members with loans shall contribute atleast Ksh 1000 of the loan taken subject to the following loan share banding variation below

Minimum deposit contributions.

A member who fails to meet the minimum contribution for deposits shall have the deficiency recovered from the loan repayment and will be treated as a defaulter for the loan rep ayment to extent of or deposit contribution recovered from his/ her loan repayments.

Withdrawable Deposits.

The Society shall operate withdrawable savings which shall be discretionary savings accounts. These deposits accounts shall prescribe terms and conditions of opening, operating and closing accounts, interest rate calculations and payments, penalties and other charges. In additions the SACCO shall make the following information available to members:-

  • The minimum amount required to open an account and the minimum balance to maintain it;
  • The minimum interest bearing balance;
  • The interest rate and fees applicable;
  • The penalty for early withdrawal or withdrawal above set limits, if any; and
  • The maturity of a term account.

For joints and group accounts, disclosures made to any one of the members shall be deemed to be made to all members.

1. Children's saving scheme

  • Sub-accounts of principal members
  • Entrance fee of Kshs. 500
  • Minimum monthly deposit of 500
  • Can be used as security by principal members loan but not used in computing maximum loan entitlement.
  • On attainment of 18 years to assume full membership rights
  • Earn interest just like all other members deposits
  • Six months notice to withdraw by principal member
  • 2. Medical cover Scheme

    This is a continuous saving scheme that inculcate a savings culture in members to save for medical emergencies

    3.Safe keeping (FOA Flex) Deposit Account

    This safe keeping account is a withdrawable deposit account where depositors can place short term deposits for specified periods of time usually between one to twelve months. The account targets members with large sums of money that they have put aside for investment and they are fairly certain of the period that they can commit the funds. The account operates as detailed below.

  • The account caters for members regular ,transactions like Instant FOA Flex loans .
  • Safe keeping Account is suitable for deposits where the customer is fairly certain of the period that he can commit the funds.
  • Minimum deposit Kshs.150,000
  • Interest rate is 2.5% computed monthly and credited monthly.One month grace period before you start earning interest
  • 1 month’s interest is forfeited if a depositor withdraws the funds before the maturity date.
  • Upon maturity the depositor can rollover the principal .
  • 4. Simba Mtalii Savings Account

    The Simba Mtalii savings account is a withdrawable deposit account which gives members a facility to save for certain eventualities like education, holiday, Christmas festive season, wedding etc. The account operates in the following manner:-

  • A member saves a minimum of 500/- per month usually through check-off or standing order.
  • A member who opens a new account has to save consistently for at least six months before they can withdraw, however for an existing account, a member may access the funds after every three months.
  • The account has got no minimum account maintenance balance.
  • Account attracts no monthly charges or maintenance fees
  • If not withdrawn it is refundable the first week of December

5. Chama Deposit Savings

The Chama Savings is a withdrawable deposit account that targets members with group savings commonly known in Kenya as "chama". The members of the group need not be Sacco members provided one of the group members is a Unipharma Sacco member. The terms and conditions of the account are:-

  • The group must have at least one member who is a Unipharma Sacco member.
  • The group must at least have three signatories to the account.
  • Minutes of the group meeting authorizing the officials to open the account shall be required to open the account
  • The group must have a name preferably registered.
  • The mode of contribution is check-off, standing order or by direct deposit.
  • Minimum monthly contribution is Ksh.2,000

For joints and group accounts, disclosures made to any one of the members shall be deemed to be made to all members.

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