1. Introduction
The Loan Recovery Policy of Shekel SACCO outlines the procedures and mechanisms for recovering loans in a manner that is efficient, fair, and minimizes financial risk to the SACCO and its members.
2. Purpose
To establish a structured and systematic approach to loan recovery that ensures the sustainability and financial health of Shekel SACCO. members who avail of these loan facilities.
4. Policy Elements
4.1. Loan Recovery Principles
- Recovery of loans shall be conducted in a manner that is respectful to members while safeguarding the assets of the SACCO
- The SACCO will pursue recovery of all delinquent loans while maintaining the highest professional and ethical standards.
4.2. Delinquency Monitoring
- Regular monitoring of loan repayments to identify overdue accounts promptly.
- Classification of delinquent loans based on the period of arrears for targeted recovery efforts.
4.3. Pre-Delinquency Management
- Proactive engagement with borrowers who exhibit signs of potential default.
- Restructuring of loans may be considered on a case-by-case basis to prevent delinquency.
4.4. Communication with Delinquent Members
- Initial contact with members will be made through courteous reminders via phone calls, SMS, social media or emails
- Formal written notices will follow if initial communication does not result in payment.
4.5. Repayment Arrangements
- Reasonable repayment arrangements may be made with delinquent members while considering their financial situation.
- Such arrangements will be formally documented and agreed upon by both parties.
4.6. Collection Practices
- The SACCO will employ fair and lawful collection practices at all times.
- All recovery actions will be documented and will adhere to the prevailing legal and regulatory framework.
4.7. Use of Recovery Agencies
- If internal recovery efforts fail, the services of approved and reputable recovery agencies may be engaged.
- All agencies must operate within the agreed-upon ethical and legal boundaries set by the SACCO.
4.8. Legal Action
- Legal action will be considered as a last resort when all other recovery efforts have been exhausted.
- The decision to initiate legal proceedings will be taken by the management team, with input from legal counsel.
4.9. Write-offs
- Loans may be written off only when all possible recovery efforts have been undertaken and there is no feasible prospect of recovery.
- Write-offs must be approved by the Committee and will be in accordance with regulatory requirements.
4.10. Recovery Performance
- Regular reports on loan recovery performance will be submitted to the management and the Committee.
- Loan recovery targets will be set annually and performance will be monitored against these targets.
5. Roles and Responsibilities
- Loan Officers: Monitor repayments and initiate recovery proceedings.
- Recovery Committee: Oversee the recovery process and approve arrangements.
- Committee: Approve write-offs and policy changes.
6. Training
- Staff will be trained in effective communication, negotiation, and legal aspects of the loan recovery process.
7. Amendments
- This policy may be amended from time to time to reflect changes in regulatory requirements or SACCO strategy.
8. Policy Review
- The Loan Recovery Policy will be reviewed annually or as required by changes in the operational environment.
9. Approval
- 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.
10. Communication
- This policy will be communicated to all staff and members and made available through the SACCO’s internal channels.
