Credit and Investment Committee
FAQs
- To set the types and limitations of loans within the SACCO and for the members.
- To discuss and make important decisions on loan requests made first by its members.
- To review, analyze, and establish loan applications and loan approval processes.
- To review and analyze the asset quality of the applicants to determine the debt-income ratio to avoid risk borrowers.
- To provide a loan agreement or covenant (terms and conditions) including principal, interest rate, loan limitations, and loan amortization schedule.
- To establish collection actions on delinquent/past-due loans (over 30 days)
- To establish comprehensive marketing materials related to the SACCO’s lending policy and legal compliance.
- To review and approve appropriate underwriting guidelines in partnership with the banking institutions’ underwriting bylaws to ensure the SACCO’s adherence to such guidelines, transparency, and non-discrimination.
- The parties of a loan shall sign the agreement prior to any disbursement of any kind.
- All approved applications to be forwarded to the board for final review and approval
- Encourage members to contribute their shares and savings as stipulated in the bylaws
- Review local, federal, bylaw, and internal policies for compliance
- Educate our members regarding how to meet and achieve short and long term goals and objectives
- Educate our members on available loans/credits and the possible alternative methods
- Recommend equity and savings roadmap/timeline to build liquidity and achieve their goals
Loans are types of credits that banks or SACCOs give to members or investors for future repayment of the principal amount. Our committee shall ensure that our lending policies regulate the risks and benefits on borrowing and repayment. The team shall also review the SACCO’s maturing loans (nearing completion) and ensure that GGDS in partnership with the lending institution would provide competitive loans and favorable market rates to its members. All loans shall be charged or secured against assets and/or member savings (deposits). Co-signers shall complete the online application as well. Their character shall be reviewed and analyzed for approval. The committee’s clause on the co-signers shall indicate the assets more than the requested amount by the borrower.
- Educate members to inform the committee on a timely manner their intent to seek a loan (preferably 2-6 months for long term loans)
- Advise members to provide honest information about future borrowing timelines
- A member must complete an online loan application form (short or long-term)
- Applicants must provide specific details including reasons for the loan, financial history including net worth, annual income, shares owned in the SACCO, collateral assets, etc.
- The member’s co-signer must complete an online application (at least two co-signers for higher amounts requested) depending on the type and nature of the loan.
- Ensure the member has met the minimum loan qualification of equity and share deposits (loans are based on share deposits and not equity).
Head of Committee
The credit and Loans
The Saving and Credit committee of the Grand Granite Diaspora SACCO (GDDS) plays an integral role to review and process loan applications. The committee’s approval process is guided by established procedures that comply with Sacco’s policies and the Kenyan laws and regulations. Loan collaterals are considered for long-term loans.
The SACCO offers short-term loans up to 500,000 shillings. The short-term loans include fast-track, emergency, medical, and education loans at a favorable 1.25% rate per month paid within a year.
A member can borrow up to 5 million shillings of long-term loans paid in four years at a 1% reducing balance 1% rate per month. The long-term loan includes land purchase, property development, and construction.
The Committee Goal & Purpose
This committee is purposely set by the 490-ACT (which is the Cooperative Society of Credits and Lending Standards and Regulations).The committee is tasked to oversee the credit and lending strategies and policies of the SACCO. The committee would explore possible methods to grow the members’ equity and savings while mitigating risks. Overall, the committee will establish loan limitations, set policies, and evaluate creditworthiness of the SACCO and their members in compliance with the internal policies and all the applicable government and banking regulations.
The Committee Membership
The loan and credit committee will have three to nine members including the chairperson. Our committee members include Agnes Nyakundi (Chair), Michael Bogonko, Emilly Ondari, Henry Onsongo, and Robert Juma.
The Committee Meetings
The loan and credit committee shall meet monthly. The minutes of all meetings shall be recorded and submitted to the supervisory team and the board members. In doing so, the committee shall ensure the SACCO’s financial stability.
Duties & Responsibilities of the Committee
This credit committee is an integral committee of SACCO's financial revenue and stability.
- It shall establish short and long-term goals. The committee shall establish the loan limitations.
- The committee shall fully learn and comprehend that the GGDS’s revenues and growth will be driven by member contributions, the loan interest, and charges.
- The committee shall review and consider wisely the 5Cs of its applicants. These include: C1= Character of the applicant, to reflect the applicant’s credit history, C2= Capacity to reflect the applicant’s debt-to-income ratio, C3= Capital to reflect the applicant’s savings and the seriousness for business, C4=Collateral to reflect the applicant’s assets to be utilized as security for the loan in case of any default, C5= Conditions to reflect the purpose of the loan, type of loan, principal of the loan, and interest rate.
- The committee shall have knowledge of savings to ensure that GGDS functions in partnership with lending institutions (banks, SACCOs, etc.)