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7/27/2019 Example of Guarantorship in Sacco Societies
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EXAMPLE OF
GUARANTORSHIP IN
SACCO SOCIETIES
BY STEPHEN KIRITU MWANGI
A CO-OPERATOR
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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.
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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.
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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.
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4. The Society shall maintaina record of all guarantors to
every loan in each memberspersonal file.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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11. Where a guarantor has filedfor bankruptcy/is bankrupt, the
applicant should seekalternative guarantors
immediately.
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THANK
YOU