Types of Loans

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Sacco By-Laws

Types of Loans

GROOTS Sacco has the following types of loans :

1. Development Loans:- under development loans we have the following:

  • Madini Loan
  • Shamba Loan
  • Business Loan
  • Kilimo Biashara Loan

2. Local Purchase Order (LPO Financing)
3. Normal Loan
4. Extension Loan
5. Emergency Loan

All Development loans, LPO and Extension loan will be charged at an interest of 10% reducing balance. Normal loan and emergency loan will be charged at 12% interest reducing balance.

The maximum repayment period for all the loans except Emergency loan will be 36 months (3 years). Emergency loan will have a maximum repayment period of 12 months.

NOTE: A member currently servicing an extension loan will not be eligible for an emergency loan.

Shamba Loan

  • Loan to be processed on request to GROOTS Sacco members
  • It will attract 10% interest rate on reducing balance basis.
  • Repayment period will be at most 36 months.
  • The loan will be guaranteed using collateral security and guarantors.
  • Minimum loan will be Kshs60000 and maximum will be three times members deposits and guaranteed.
  • Processing fees of 2% will be charged.
  • Market determined insurance fee will be charged.
  • The loan will be provided to members purchasing land. They must provide sale agreement, land search report etc.
  • Land valuation will be carried out by Groots SACCO and conveyance cost borne by the borrower.
  • The loan will be repaid on monthly basis.
  • The loan will be processed within 30 working days.

Madini Loan

  • Loan to be processed on request to GROOTS SACCO members of Kakamega County
  • It will attract 10% interest rate on reducing balance basis.
  • Repayment period will be at most 36 months.
  • The loan will be guaranteed using collateral security and guarantors.
  • Minimum loan will be Kshs60,000 and maximum will be three times members deposits and guaranteed.
  • Processing fees of 2% will be charged.
  • Market determined insurance fee will be charged.
  • The loan will be processed within 15 working days.
  • The loan will be paid on monthly basis.

Business Loan

  • Business permit should be provided and or photos of the business and or daily receipts paid to county government
  • Loan to be processed on request to GROOTS SACCO members
  • It will attract 10% interest rate on reducing balance basis.
  • Repayment period will be at most 36 months.
  • The loan will be guaranteed using collateral security and guarantors.
  • Minimum loan will be Kshs60,000 and maximum will be three times members deposits and guaranteed.
  • Processing fees of 2% will be charged.
  • Market determined insurance fee will be charged.
  • The loan will be provided to members undertaking business.
  • The loan will be repaid on monthly basis.

The loan will be processed within 15 working days

Local Purchase Order (LPO) Financing

  • Loan to be processed on request to GROOTS SACCO members
  • It will attract 10% interest rate on reducing balance basis.
  • Repayment period will be at most 36 months.
  • The loan will be guaranteed using collateral security and guarantors.
  • Minimum loan will be Kshs60000 and maximum will be three times members deposits and guaranteed.
  • Processing fees of 2% will be charged.
  • Market determined insurance fee will be charged.
  • The loan will be repaid on monthly basis.
  • The loan will be processed within three (3) working days.
  • Local purchase order should be provided.
  • An invoice of goods to be purchased.

Business Loan

  • Business permit should be provided and or photos of the business and or daily receipts paid to county government
  • Loan to be processed on request to GROOTS SACCO members
  • It will attract 10% interest rate on reducing balance basis.
  • Repayment period will be at most 36 months.
  • The loan will be guaranteed using collateral security and guarantors.
  • Minimum loan will be Kshs60,000 and maximum will be three times members deposits and guaranteed.
  • Processing fees of 2% will be charged.
  • Market determined insurance fee will be charged.
  • The loan will be provided to members undertaking business.
  • The loan will be repaid on monthly basis.

The loan will be processed within 15 working days

Local Purchase Order (LPO) Financing

  • Loan to be processed on request to GROOTS SACCO members
  • It will attract 10% interest rate on reducing balance basis.
  • Repayment period will be at most 36 months.
  • The loan will be guaranteed using collateral security and guarantors.
  • Minimum loan will be Kshs60000 and maximum will be three times members deposits and guaranteed.
  • Processing fees of 2% will be charged.
  • Market determined insurance fee will be charged.
  • The loan will be repaid on monthly basis.
  • The loan will be processed within three (3) working days.
  • Local purchase order should be provided.
  • An invoice of goods to be purchased.

Kilimo Biashara Loan

  • Loan to be processed on request to GROOTS SACCO members
  • It will attract 10% interest rate on reducing balance basis.
  • Repayment period will be at most 36 months.
  • The loan will be guaranteed using collateral security and guarantors.
  • Minimum loan will be Kshs60,000 and maximum will be three times members deposits and guaranteed.
  • Processing fees of 2% will be charged.
  • Market determined insurance fee will be charged.
  • The loan will be repaid on monthly basis.
  • The loan will be processed within 15 working days.
  • Supporting documents (Lease agreement, title deed, copy of contracts, bank statements, Mpesa statements etc).

Normal Loan

  • Loan to be processed on request to GROOTS SACCO members
  • It will attract 12% interest rate on reducing balance basis.
  • Repayment period will be at most 36 months.
  • The loan will be guaranteed using collateral security and guarantors.
  • Minimum loan will be Kshs60000 and maximum will be three times members deposits and guaranteed.
  • Processing fees of 2% will be charged.
  • Market determined insurance fee will be charged.
  • The loan will be repaid on monthly basis.
  • The loan will be processed within 15 working days.

Emergency Loan

  • The loan will be issued in case of unforeseen circumstances and they may have existing loans
  • Minimum loan will be Kshs60,000 and maximum will be three times members deposits and guaranteed.
  • Total outstanding loans shall not exceed three four members borrowing capacity
  • Repayment period shall be 12 months
  • Interest rate shall be 1% per month on reducing balance basis
  • The loan will be guaranteed using collateral security and guarantors.
  • Processing fees of 2% will be charged.
  • The loan will be processed within three (3) working days.

Market determined insurance fee will be charged.

Extension Loan

  • Loan to be processed on request to GROOTS SACCO members
  • It will attract 10% interest rate on reducing balance basis.
  • Repayment period will be at most 36 months.
  • The loan will be guaranteed using collateral security and guarantors.
  • Minimum loan will be Kshs60,000 and maximum will be three times members deposits and guaranteed.
  • A fee of 5% will be charged on previous outstanding.
  • Market determined insurance fee will be charged.
  • The loan will be repaid on monthly basis.
  • The loan will be processed within 15 working days.
  • Terms and conditions for the other loan applied.