1. Policy Objective
The Shekel SACCO Loan Policy aims to provide a systematic approach to the extension of credit to eligible members, ensuring fairness, transparency, and risk management while promoting the economic prosperity of the members and stability of the SACCO.
2. Eligibility for Loans
- All members of Shekel SACCO with active membership status and who meet the defined criteria are eligible to apply for loans.
- Members must have been active for a minimum period as determined by the SGM (4 months) and must have met the minimum savings requirement.
- The member’s ability to repay shall be a primary consideration in the loan approval process.
3. Loan Products
Shekel SACCO shall offer various loan products tailored to meet the needs of our members, which may include:
Quick Loans
The Emergency Loan is designed to provide quick financial assistance to members in urgent situations. With expedited processing and approval, members can access funds within 24 hours to address unexpected financial needs.
Ordinary Loan
Our standard loan product intended for general economic development of SACCO members. It provides flexible financing and comfortable repayment terms.
Group Loan
The Group Loan provides financial support to organized groups of SACCO members. It utilizes group dynamics and collective responsibility to enhance loan security and repayment, making it ideal for community-based enterprises and joint ventures.
Business Loans
This product is designed for Shekel SACCO members for Business improvement. This product is acquired by only members with business savings accounts and without any existing loan in the society.
Asset financing loan
This product is designed specifically for SACCO members who want to finance the purchase of any asset with the primary aim of generating income for example land, motor vehicle and motorcycles, small scale processing equipment, etc. Income from the business is deposited in a Business Savings Account.
Agriculture Loan
This product is designed for SACCO members who want to finance business activities in agriculture such as crop cultivation, dairy, poultry, piggery, fishing, fish farming and bee keeping etc.
4. Loan Application Procedure
- Members must complete a loan application form, providing all required documentation, including proof of income and purpose of the loan.
- All loan applications may require a guarantor or security depending on loan type/setup, as per the SACCO’s guidelines.
- Loan processing fees of 5,000 UGX must be paid at the time of the application.
5. Loan Approval Process
- The Loan Committee shall review applications to ensure they meet the SACCO’s lending criteria as set by the AGM.
- Loans shall be approved based on the borrower’s repayment capacity, any securities and guarantors presented, purpose of the loan, and the availability of funds.
- The Loan Committee’s decisions must be communicated to applicants in a timely manner.
6. Loan Disbursement
- Loans will be disbursed after due diligence is done by the Committee.
- Loan disbursement shall be made directly to the member’s account within a specified period (two weeks) following the approval and fulfillment of all conditions.
- The SACCO reserves the right to disburse loan amounts in stages, based on the nature of the loan purpose.
7. Interest Rates and Repayment
- Interest rates shall be competitive and determined by the Committee based on prevailing market rates and SACCO’s financial health.
- Repayment schedules will be established at the time of loan disbursement and may vary based on loan type, amount, and member’s repayment capacity.
- Early/distributed repayment of loans shall be allowed without penalty.
8. Defaulting and Recovery
- Members are expected to adhere strictly to the agreed repayment schedule.
- In the case of default, the SACCO shall take appropriate action to recover the outstanding amounts, including but not limited to, activating guarantor obligations, applying loan insurance where available, and initiating recovery proceedings in line with loan recovery policy.
- Chronic defaults may lead to suspension of loan privileges and membership status.
9. Loan Monitoring and Reporting
- Loan performance shall be monitored regularly to identify potential issues early and take corrective action.
- The SACCO will maintain accurate and up-to-date records of all loan transactions.
10. Policy Review and Amendments
- This policy shall be reviewed annually or as necessary to incorporate changes in the regulatory environment, market conditions, or SACCO operations.
- Any amendments shall be approved by the Committee and communicated to all members.
11. Acceptance of Terms
- By applying for a loan with Shekel SACCO, members acknowledge and accept the terms and conditions set out in this Loan Policy.
Adaption
This policy was drafted by the Xavian Group and has been approved by the founding members of Shekel SACCO during a Special General Meeting and is effective as of 15th September 2026.
