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QUEENSWAY SAVINGS AND CREDIT CO-OPERATIVE SOCIETY LIMITED - POLICIES


1.      Membership.

 a.       Employees from any company registered and operating within Kenya can be able to join the Society so long as they can be able to attain the minimum of 10 employees willing and able to join the Society.

 b.      Every new member is required to pay an entrance fee of Ksh. 1,000 and a capital amount of Ksh. 5,000. These amounts are non – refundable, however, the minimum share capital can be transferred to another member on payment of a transfer fee of Ksh. 200 accompanied with a written authorisation from the transferee to transfer the shares to the transferee.

 c.       All the Society members are required to contribute to their savings a minimum of Ksh. 3,000 every month to maintain membership. Members can always contribute more at their own will.

 d.      Member contributions/savings shall be done either through check-off or standing order instructions or any other method the management committee may approve.

 e.       Where a member fails to contribute savings/deposits for three consecutive months, he/she shall be transferred to a dormant members account and shall cease to be entitled to any interest declared and payable by the Society.

 f.       No member of Queensway SACCO Ltd shall belong to another SACCO Society at the same time except in accordance with section 18 of the Co-operative Societies Act of 1997.

 2.      Loans.

 For a member to qualify for a Co-operative loan:

 a.       A member must have made monthly contributions consistently for six months to qualify for a loan.

 b.      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.

 c.       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.

 d.      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.

 e.       A member applying for a loan should attach a latest certified payslip or three months latest bank statements for self employed borrowers, copy of ID/Passport.

 f.       Where a member is employed on a contract, he/she should be granted a loan within his/her contractual period.

 Loan applications:

 a.       All applications for loans shall be made on prescribed forms and shall in each case set out the amount applied for, the purpose of the loan, terms of repayment and type of security provided. The loan application form must be fully completed and supported by the most recent pay slip (or a letter from the employer confirming the applicant's ability to repay the loan comfortably).

 b.      Applications for development loans must be registered in the society's office on or before the 30th of every month.

 c.       Loan applications shall be considered in the order in which they are received provided that whenever there are more applications for loans than there are funds available; preference will be given, in all cases, from the smallest in ascending order.

 d.      However where amounts applied for are approximately the same, preference will be given to loans for shorter periods. Within the foregoing preferences, priority shall be given in the following order:

1.      members who have never had loans

2.      new members who have qualified for loans

3.      members who have cleared their first loans and have applied for fresh loans

 e.       The maximum amount of loan granted to a member shall not exceed three times a member's savings/contributions/deposits. Where total deductions exceed two thirds of a member's net basic salary, the loan shall be reduced accordingly.

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

 g.      Outstanding development and supersaver loans must have been repaid for at least 12 months/1 year before a new/refinancing loan is granted.

 h.      Lump sum loan repayments for the purpose of borrowing a new loan must be retained in society for at least one (1) month.

 Loan approvals:

 a.       The loan processing is the responsibility of accounts function and is to be vetted and reviewed by the Credit Committee of the society.

 b.      All loans shall be restricted to members only and shall be approved by the Credit Committee or full Management Committee where necessary. No member of the loan approving Committee shall be present when his or her loan application is being considered.

 c.       Employees of Queensway Sacco Ltd shall be eligible for membership but are not eligible to become members of the Management Committee or any other sub-committee in the society. Employee loans shall be approved by the credit committee in the normal manner.

 d.      An employee who tampers with his/her monthly share contribution and loan repayment is liable to prosecution under section 73 of the Co- operative Societies Act No. 12 of 1997.

 Repayment:

 a.       The repayment period shall be determined by the Management Committee as a policy but in all cases shall not exceed 36 months.

 b.      Deductions for loan repayments shall commence not later than the month following that in which the loan was paid to the member.

 c.       Both loan repayment and member contributions/savings shall be done either through check-off or standing order instructions.

 d.      A member will be required to repay the loan within the time specified on the loan application form.

 e.       Loans will be repaid from a member's salary and no member should be allowed to suffer total deductions including savings, loan repayment and interest in excess of two thirds of his /her monthly net basic salary. Nothing in the foregoing need prevent any member from repaying his/her loan and interest in whole or in part, prior to its maturity.

 f.       Lump sum loan repayment received subsequent (within 20 days after member contributions) to any payroll month will not be subjected to interest of 1% per month i.e. the entire payment will be used to settle the principle balance.

 g.      While a member is allowed to repay the loan from other sources beside the individual salary, under no circumstances should these sources be taken into account in determining the member's ability to repay the loan at the time of loan granting.

 h.      For members not in full time employment, they shall be required to show proof that they are capable of repaying the loan by giving bank statement for the past six months.

 i.        Emergency loans are loans up to a maximum of Ksh. 100,000 and shall be repaid within 12 months.

j.        A member's shares and deposits pledged, as security for another member's loan shall not be surrendered to offset his/her outstanding loan unless the former can provide an alternative security for the latter's loan.

 Interest rate:

 The rate of interest on all loans shall be 1% per month on a reducing balance basis until the same is changed.

 Guarantee:

 a.       Unless the loan applied for is equal to or less than member’s contributions/deposits, it must be secured by guarantors. The total savings/deposits of the borrower and those of the guarantors must be equal to or more than the loan applied for.

 b.      All guarantors must be members of the society.

 c.       Members of the Management Committee / Supervisory Committee and Queensway SACCO Employees shall not guarantee loans among themselves.

 d.      The obligations 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 loans guaranteed have been reduced to or less than the member’s shares. The Society shall maintain a record of all guarantors to every loan.

 e.       Information on eligibility to guarantee shall only be disclosed to the intending guarantor.

 Contribution to loan ratios:

 Minimum savings contributions shall be Ksh. 3,000 per month for members with the following exceptions;

 In cases of loans to be repaid within 36 months members would be expected to contribute towards their shares and deposits as shown below:

 a.       Members with loans above Ksh. 300,000 to Ksh. 500,000 shall contribute minimum savings/deposits of Ksh. 5,000 per month for the entire loan repayment period.

 b.      Members with loans above Ksh. 500,000 up to Ksh. 1 million shall contribute minimum savings/deposits of Ksh. 7,500 per month for the entire loan repayment period.

 c.       Members with loans above Ksh. 1 million to Ksh. 1.5 million shall contribute minimum savings/deposits of Ksh. 10,000 per month for the entire loan repayment period.

d.      Members with loans above Ksh. 1.5 million up to Ksh. 2 million shall contribute minimum savings/deposits of Ksh. 15,000 per month for the entire loan repayment period.

 Other security:

 The Society accepts share certificates from the Queensway Housing Society, Unit trusts and other forms of security as may be approved by the Management Committee may be accepted.

 Loan defaults:

 a.       If a member fails to make periodical loan repayments to the society as stipulated to a maximum of three months, the loanee shall be informed immediately in writing in the first month. On the second month, the guarantors shall be notified that they will be called upon to honour their obligations if the loanee fails to service the loan by the end of the third month.

 b.      In case of any default in payment, the entire loan balance will immediately become due and payable at the discretion of the Society and all savings/deposits owned by the member and held by the member and any interest and deposits due to the member will be set against the owed amount. The member will be liable for any costs incurred in the collection of the loan balance and accumulated interest. Any remaining balance will be deducted from the guarantors or terminal benefits where applicable.

 c.       Where a member has defaulted for more than three months, he/she shall cease to be a member and will only be reinstated on the Management Committee's approval. His/her account will be placed under default.

 d.      A member who fails to meet the minimum contributions/deposits requirement as set above in contributions to loan  ratio, shall have the deficiency recovered from the loan repayment and will be treated as a defaulter for the loan repayment to the extent of contribution/savings recovered from his/her loan repayment

 3.      Withdrawal.

 a.       Where a member wishes to withdraw his /her deposits or transfer his membership from the society, he/she will be required to give the Society a written notice of up to 60 days of his/her intention to withdraw the same.

 b.      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 the loan balance can be fully be offset by the members savings/deposits.

 c.       A member who withdraws due to retirement or resignation will be required to clear all outstanding loans and provide alternative guarantors for those loans that he/she had guaranteed before retirement or resignation. Where a member who is retiring or resigning is not able to clear immediately, he/she will be required to make arrangements with the society for repayments. The Society will be required to ensure that no loan is granted with repayment period going beyond the retirement /resignation date of a member if that date is known.

d.      Where a member leaves the common bond by virtue of transfer or retirement, he/she may continue to be a member so long as they inform the Society of this change or may transfer all his/her shares to the Society which he/she intends to join under the new employer.

 e.       No member will be allowed to withdraw part of his /her shares or offset part of the shares against an outstanding loan unless he/she ceases to be a member. While a member changes employers, he/she may transfer his/her shares to the Society of the new employer from the time he/she becomes a member of the Society of his/her former employer. In all cases, a member must clear any outstanding loan with the society of his /her old employer first. The Society of his/her employer shall transfer shares direct to the Society of his/her new employer by drawing a cheque in the name of the Society, if the member so advises.

 f.       All change of employers must be communicated to the Society by the members and all companies whose employees are members of the Society are under obligation to inform/communicate to the Society the facts of the employee change and provide the particulars of any employee who is a member and changes employment.

 4.      Dividends.

 Where a member is in arrears in loan repayments or underpaying a loan, the Society will use any dividends payable to that member to recover the loan arrears

 5.      Penalties.

 A penalty charge of 10% of the loan repayment amount per month shall be levied and added to a member’s loan if loan repayment remittances are not received by the 15th day of the month. Loan cancellations attract a penalty of 2.5% on the amount approved.

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