wazua Thu, Apr 16, 2026
Welcome Guest Search | Active Topics | Log In

2 Pages12>
SACCO LOANS
Options
Previous Topic · Next Topic
amauriceus
#1 Posted : Monday, September 07, 2009 8:50:00 AM
Rank: Member

Joined: 9/13/2006
Posts: 17
Hi,

Does anyone know exactly how Sacco loans work? This maths seems to get more complicated than I thought.

Assuming I have purchased 100K in shares,sacco constitution says that am entitled to 300k loan.

Before taking the loan,I decided to guarantee a friend of mine in the sacco 100k so that he can take a loan.

1) Is it possible for this friend of mine to also guarantee me 100k assuming he has similar amount in sacco shares?

2)I asked my sacco the maximum I can get in loans and they tell me 0(Because I have guaranteed someone else all my shares!). And that although I am entitled to 300k loan,I need to find other members to guarantee me the full 300k before I can get this loan.

This to me means that for every shilling that the sacco lends,it must be backed up by other members idle shares against which there are no outstanding loans,and the same have not been used to guarantee other members loans.

If this is how sacco's work,does it make any sense to continue being a member?
amauriceus attached the following image(s):
saccoimages.jpg (2kb) downloaded 0 time(s).
Back to top
  | | Edit by moderator: Tuesday, March 02, 2010 7:55 AM | Reason: Not specified
mtaalam
#2 Posted : Monday, September 07, 2009 9:25:00 AM
Rank: Member

Joined: 11/2/2006
Posts: 519
Why not ask your sacco officials?

Bright and interesting people talk about ideas.
Those of average intelligence talk about things.
Stupid people talk about other people.
Back to top
  |
jerry
#3 Posted : Monday, September 07, 2009 9:36:00 AM
Rank: Elder

Joined: 9/29/2006
Posts: 2,570
Most likely ur sacco is not employee based hence check-off is probably not possible. I belong to such a sacco that operates exactly the way u've explained. The only slight difference is that u can secure ur loan thro logbook or title-deed. In employment based saccos or others where checkoff is possible a shilling can guarantee 2 or 3 depending on risk assessment and historical default rate or scientific research.

Crocodile tears: If you can't assist me when I'm alive en you attend my funeral.
The opposite of courage is not cowardice, it's conformity.
Back to top
  |
amauriceus
#4 Posted : Monday, September 07, 2009 9:50:00 AM
Rank: Member

Joined: 9/13/2006
Posts: 17
@Mtaalam,I a already asked my sacco officials....its their explanation that baffled me. Its not what I expected.
Back to top
  |
MADE
#5 Posted : Monday, September 07, 2009 10:12:00 AM
Rank: Member

Joined: 11/12/2007
Posts: 391
@jerry- yu said it.
In these times of high defaults,Security of the loan is foremost b4 its disbursement. However Saccos which still apply rules rigidly have no future growth

I was born intelligent,education ruined me.
Age is transforming me into an Elder;becoz Admin hasn't made me one.
Back to top
  |
jerry
#6 Posted : Monday, September 07, 2009 10:29:00 AM
Rank: Elder

Joined: 9/29/2006
Posts: 2,570
Thanx. I agree with u that some degree of 'bad loans' (or rather risk) could b necessary for growth of not just saccos but even the members.

Crocodile tears: If you can't assist me when I'm alive en you attend my funeral.
The opposite of courage is not cowardice, it's conformity.
Back to top
  |
Poggie
#7 Posted : Monday, September 07, 2009 11:04:00 AM
Rank: Member

Joined: 10/27/2008
Posts: 94
@sk admin ... some time back a member had posted a detailed comparative analysis on the pros & cons of bank loans alongside sacco loans. How can I revisit the same. Please assist. Thanks.

As a man thinketh so is he
As A Man Thinketh So is He
Back to top
  |
Correct
#8 Posted : Monday, September 07, 2009 11:07:00 AM
Rank: Member

Joined: 4/23/2008
Posts: 7
Thats one of the controls to ensure they dont sink unexpectedly as a result of non-guaranteed loans by members. If for example your friend has a loan of 300K guaranteed by 1-His contribution 100K,2-Your guarantee (your shares) 100K and another guarantee by a friend of 100K decides to default then:

1> He / she forfeits his 100K shares contribution.

2> You lose your share contribution worth 100K & thus must chase up your buddy to pay up.

3>Third friend forfeits item deposited as guarantee for 100K. The overall effect is that the Sacco will not have any bad debts in its books and thus ensures continuity for the sacco.

In short; if you use your shares to guarantee another members loan you cannot use the same to guarantee another loan(including your loan),You must find other guarantees / collateral to support the amount you borroe.

Happy investing
Back to top
  |
mtaalam
#9 Posted : Monday, September 07, 2009 11:55:00 AM
Rank: Member

Joined: 11/2/2006
Posts: 519
@ amauriceus

You should get your officials to explain it to you 100 times if necessary until you understand it. We might tell you so many things and our understandings and believes but eventually whatever you sign will be between yourself and your sacco. Be wise and know what you're getting into 1st hand.


Bright and interesting people talk about ideas.
Those of average intelligence talk about things.
Stupid people talk about other people.
Back to top
  |
jerry
#10 Posted : Monday, September 07, 2009 12:07:00 PM
Rank: Elder

Joined: 9/29/2006
Posts: 2,570
What u say is correct! but if u make a sacco loan as difficult to get as a bank loan then we rather have banks only and no saccos. Remember that saccos led members their own cash! in most cases.

Crocodile tears: If you can't assist me when I'm alive en you attend my funeral.
The opposite of courage is not cowardice, it's conformity.
Back to top
  |
2 Pages12>
Forum Jump  
You cannot post new topics in this forum.
You cannot reply to topics in this forum.
You cannot delete your posts in this forum.
You cannot edit your posts in this forum.
You cannot create polls in this forum.
You cannot vote in polls in this forum.

Wazua Groups Theme
Powered by YAF | YAF © 2003-2009, Yet Another Forum.NET
Copyright © 2026 Wazua.co.ke. All Rights Reserved.