7/27/2019 Example of Guarantorship in Sacco Societies

1/14

EXAMPLE OF

GUARANTORSHIP IN

SACCO SOCIETIES

BY STEPHEN KIRITU MWANGI

A CO-OPERATOR

7/27/2019 Example of Guarantorship in Sacco Societies

2/14

1. Unless the loan applied for is equal

to or less than a members shares, it

must be

secured by guarantor((s). The totalshares of the borrower and those of

the guarantor(s) must be equal to or

more than the loan applied for.

7/27/2019 Example of Guarantorship in Sacco Societies

3/14

2. a) No members will be allowed to

guarantee more than three loans. All

guarantors must be members of the

Society.b) Members of the Management

Committee and the Supervisory

Committee shall not guarantee loansamong themselves.

7/27/2019 Example of Guarantorship in Sacco Societies

4/14

3. The obligations of the previous

guarantors shall cease upon changeof guarantors but subject to new

guarantors being accepted by the

Society. The obligation of theguarantors shall also cease when

loans guaranteed have been

reduced to or less than the

members shares.

7/27/2019 Example of Guarantorship in Sacco Societies

5/14

4. The Society shall maintaina record of all guarantors to

every loan in each memberspersonal file.

7/27/2019 Example of Guarantorship in Sacco Societies

6/14

5. Where a member wishes to

withdraw from the Societys

membership, he/she may

be required to give the Society awritten notice of up to 60 days of

his/her intention to withdraw.

7/27/2019 Example of Guarantorship in Sacco Societies

7/14

6. No member shall be allowed to

withdraw from the Society membership

unless, the members loan is repaid in full

or the loan balance can be fully offset by

the members share. Such a member willalso have to satisfy the Society that all

loans guaranteed have been paid in full or

the balance does not exceed the sharesof the members whose loans were

guaranteed.

7/27/2019 Example of Guarantorship in Sacco Societies

8/14

7. A member who retires from

the common bond, but retainshis/her membership in

he society shall be granted loanonly up to the limit of his/her

shares.

7/27/2019 Example of Guarantorship in Sacco Societies

9/14

8. A member who withdraws due to

retirement or resignation shall be

required to clear all outstanding loans

and provide alternative guarantors in

cases of loans guaranteed beforeretirement or resignation. Where a

member who is retiring or resigning is not

able to clear immediately he/she will berequired to make arrangement with the

Society for repayments.

7/27/2019 Example of Guarantorship in Sacco Societies

10/14

The Society shall be required to

ensure that no loan is grantedwith repayment period going

beyond theretirement/resignation date of a

member if that is known.

7/27/2019 Example of Guarantorship in Sacco Societies

11/14

9. Where a member is employed on

contract, he/she should be granted aloan payable within his/her contractual

period. However, in cases of

emergency, loans may be granted

provided that they are guaranteed by

Societys members.

7/27/2019 Example of Guarantorship in Sacco Societies

12/14

10. In case a loan is not repaid for a month, the

society shall inform the loanee immediately inwriting with a copy to each guarantor. If no

repayment is effected during the second month

the guarantors shall be informed of this fact and

be notified that they shall be called upon to honourtheir obligations if no repayments are effected at

the end of the third consecutive months. However,

the society will still maintain efforts to recover thedefaulted loan from the loanee.

7/27/2019 Example of Guarantorship in Sacco Societies

13/14

11. Where a guarantor has filedfor bankruptcy/is bankrupt, the

applicant should seekalternative guarantors

immediately.

7/27/2019 Example of Guarantorship in Sacco Societies

14/14

THANK

YOU