There shall be a loaning policy and procedures which shall be prepared by the management committee. The policy will be reviewed from time to time.
All loans to members shall be approved by the credit committee and shall be restricted to society members only.
All members shall have to disclose their financial status when applying for a loan. Loans received by members from other sources and incomes from other sources (not through the society) should be disclosed;
All applicants for a loan shall be checked to certify that the information stated is correct and that the members are able to repay the loan
All loans shall be guaranteed by a minimum of three society members
It shall not be obligatory on the society to grant any loan and it shall be entitled to call for such security as it may consider suitable under the circumstances of each case.
Where a member is granted a loan, he/she shall be obliged to repay the loan and interest. Thereof to the full
The rate of interest charged upon such loans shall be in accordance with the credit policy
The society shall not make loans or allow overdraft facilities to any non member;
No loan shall be granted except for a specified and approved purpose;
The loans agreement shall be signed and stamped on behalf of the society by duly authorized officers of the society
The society shall maintain a loan register containing the name of the borrower, the amount borrowed, and the rate of interest, the date of the loan, the amount of agreed installment and the final date of the repayment
All loans shall be applied for on the forms provided by the society for the purpose. The loan application form shall set out the amount applied for, the purpose for which the loan is desired, the terms of repayment, the security and such other information as the credit committee or management committee may require. All applicants for loans and the reports of the credit committee thereon shall be filled as permanent records of the society
Loans applications shall be considered by the credit committee in the order in which application is made, unless the loan is deemed by the committee to be an “emergency loan”.
It is the responsibility of the borrower to ensure that he/she has understood the terms of the loans from before signing it
No loans shall be made to any member in excess of 5 % of the society’s total deposits and reserves
SECURITY FOR LOANS
The credit committee or management committee shall ask for such security of loans as it may consider necessary. The shares and deposits of a member are taken as a security
The committee may refuse to accept as a guarantor a person who is himself in receipt of a loan, and may decline to grant a loan subsequently to a member while he remains liable as a guarantor
No executive officer or member for the managing committee or any sub- committee or employee shall act as an endorser, or guarantor, for borrowers from the society
A borrower or guarantor may apply to the credit committee for a change of guarantors
No member can guarantee more than 10 loans
REPAYMENT OF LOANS
A borrower may, on any day on which the society is open for business, repay his loan in whole or in part prior to maturity
Any loan more than three months overdue may be referred to guarantors with a demand notice for them to clear all outstanding loans guaranteed by them provided that the society shall first give written notice of this intention to the borrower before so acting