EDS LOAN POLICY
The main aim of a Sacco is to promote Savings and Provide a mechanism to access Credit facilities to members. It
is against this backdrop that the Committee of Management of Eshibinga Development SACCO has developed this
Revised Loan Policy reference number EDSLP/001/2020 dated 01st April 2020. This revised Loan Policy has been
• The changing business environment.
• The changes in member needs.
The EDS Policy outlines the types of loan products available in our SACCO, how a member can access each and the
terms and conditions of accessing same.
1. Development loan
- These are loans for development purposes eg purchase of immovable assets.
- Disbursement is within one month upon receipt of application Subject to approval during the
- Repayment period is within 36 months.
- The loan is granted three (3) times of member’s shares and deposits and is charged an interest rate of one percent (1%) per month on reducing balance and the maximum loan shall be as stated in the by-laws.
- A member can use an Asset as a guarantee to the loan, however a maximum value equivalent to 50% of the Asset value will be considered. The SACCO will appoint a professional valuer and however the following costs will be borne by the member applying the loan:-
i) Valuation fees ii) Legal fees ...This should be done by a practicing advocate.
2. NORMAL LOAN
- This is for the general needs of the members
- Disbursement is within one month upon receipt of application Subject to approval during the management committee meeting and availability of funds.
Repayment period is within 36 months.
The loan is granted three (3) times of member’s shares and deposits and is charged an interest rate of one percent (1%) per month on reducing balance.
3. EMERGENCY LOAN
This Loan facilitates any unforeseen circumstances for example; sudden hospitalisation, court fines, and other unforeseen circumstances beyond a member’s financial ability.
Maximum amount of Fifty thousand Kenya Shillings (KES 50,000.00)
The outstanding loan and emergency loan should not exceed three (3) times members share deposit.
This is payable within 12 months at an interest rate of one percent (1%) per month on a reducing balance basis.
Emergency Loans are disbursed within forty-eight (48) working hours.
4. SHORT TERM LOAN
Short Term Loans are taken to take care of unexpected events.
• Short term loans can be applied at any time of the month and on need basis.
• It is repayable within three (3) months.
• An interest charged is a flat rate of 5%, to be deducted upfront from the loan being applied.
• Disbursed within forty-eight (48) working hours subject to availability of funds.
• Maximum loan amount is fifty thousand Kenya Shillings (KES 50,000.00)
5. BUSINESS LOANS
(i). Farming Loan
Green Loan (Small scale farming loan)/Green house
To finance purchase of farm inputs such as certified seeds, fertilizers, chemicals, machinery hiring, labour and
• Land leasing is not covered.
• Loan applications should be done within a reasonable timebefore the setting in of planting seasoni.e. 2
• Payable within 12 months.
• The amount loaned will depend on the share deposit, input needed and size of the farm i.e this is for
subsistence farming only.
• A monthly interest rate is two percent (2%) on reducing balance
(ii). Boda Boda Loan
• Takes care of members who want to buy a motor cycle on loan.
• Application should be done early enough (one month before) for planning purposes. A proforma invoice
from the supplier should be provided and the payment shall be made direct to the seller/supplier)
• Interest to be charged at (two) 2% per month on reducing balance.
• Repayment period is within 12 months of disbursement.
• Disbursement will be 80% of the cost within a month upon receipt of application subject to availability of
funds. The remaining 20% will be taken care by the member
(iii). Small scale business loan
• Takes care of small scale traders e.g kiosks, natural talents (e.g art) and vocational skills based business.
• The loan shall be disbursed within one month upon receipt of application subject to availability of funds.
• Interest is two percent (2%) per month on reducing balance.
• Repayment period is within 6 months.
6. SCHOOL FEES LOAN
• This loan is taken to facilitate payment of school fees, it covers primary, secondary school, college or
• A maximum of one hundred thousand shillings (KES 100,000.00) will be given depending on the member’s
shares and the loans held.
• This loan will be disbursed within one week of application, subject to availability of funds.
• Interest rate is one percent (1%) per month on a reducing balance basis.
• School fees Loan is payable within twelve (12) months.
• A member shall be allowed one school fees loan running at any given time.
• A member should provide documentation to prove the need of the school fees and a cheque will be
written in favour of the institution that the school fees is being paid, the balance from the school fees may
be paid to the parent/guardian subject to proof of school related expenses.
7. TOP UP LOAN
• The new loan must be fully guaranteed.
• This is treated as a new loan
• One should have paid at least 50% of the existing loan
• A commission of 2% or KES 1,000.00 (whichever is higher) will be charged on the outstanding loan.
TERMS AND CONDITIONS
I understand that basic rules applicable to this application are as listed and understand the loan will be granted
only according to these rules.
1. Member loans are limited to three times the sum of shares and deposit held, but subject to availability of
2. A member may not be considered for a loan if his/her contributions have not been regular.
3. For salaried employees the loan repayment amount will be done based on the existing labour laws.
4. A member will be required to maintain a monthly loan repayment depending on the loan disbursed and
the repayment period.
5. A member shall have only one loan under each loan category.
6. To be eligible for a loan facility, a member must have contributed for a minimum period of six consecutive
months having a minimum shares and deposit contribution of five hundred Kenyan shillings (KES 500.00)
per month and share capital as provided in the by-laws.
7. A member applying for a loan which is less the amount of his/her savings will need to have, a minimum of
a third of the loan amount guaranteed.
8. A lump sum contribution for the sake of securing a loan shall be considered only if such money remains in
the society for a minimum period of three months from the date of deposit.
9. A member may offset their outstanding loan and other liabilities against his/her shares if they are enough
to cover the loan. He/she will then be required to start building his/her share deposit portfolio afresh and
be eligible for a loan after six months of rebuilding the share portfolio.
10. In case of default in repayment, the entire balance of the loan will immediately become due and payable
based on the by-laws and all deposits owned and held by the member and any interests and deposits due
to the members will be settled against the owed amount. The member will also be liable for any costs
incurred in the agencies so appointed for the recovery of the loan balance and accumulated interest. Any
remaining balance will be charged to the guarantor(s) deposits based on the amount guaranteed per
member, until the loan is fully paid. The SACCO management will pursue all available legal means to
recover the unpaid loan from the member who is in default.
11. A member may apply for a special consideration for a loan outside the loan application review timelines
when need arises, however the member will be required to do it by writing a letter addressed to the
Chairman of the SACCO, the letter must be dated and signed by the member. A member will be charged
five percent (5%) of the loan or KES 1,000.00 (whichever is higher) which will be deducted upfront from
the amount being applied for. This will be subject to availability of funds and will be paid within a
reasonable time from the receipt of the letter by the office.
© 2022 Eshibinga Development Savings & Credit Cooperative Society Limited
PRODUCTS & SERVICES
OUR CORE CORE BUSINESS (PRINCIPAL ACTIVITY).
• Inculcate the culture of savings by providing a means through which members can create a pool of funds
from which they can Easily Access affordable loans at fairly reasonable interest rates for their Economic
HEAD OFFICE: UTALII HOUSE;
1ST FLOOR, SOUTHERN WING, OFFICE NUMBER 118.
P.O BOX 6154 – 00100 NAIROBI
TEL: +254 797 709711, +254 100 345799