ACCEPTABLE LOAN COLLATERAL

Don’t get stuck because you can’t find guarantors. There are other collaterals acceptable by Mhasibu SACCO as below

Guarantors

Guarantors

  • A member can guarantee up to six people.
  • The guarantor must be in good standing (must not be in default/loans guaranteed by them must be performing)
  • Requirement from the guarantors: Fill the guarantor ship form and attach the ID copy.;

Land Collateral Pledge

Land Collateral Pledge

This constitutes land within Kenya, and fully owned by the member or his/her spouse. A lien shall be established with this guarantee

  1. VALUE

    • 60 % (for Nairobi and its environs) and 40% (for other areas) value of acceptable land based on valuation report shall be considered adequate collateral for loan.

  2. Application Requirements:

    • A search of the land must be done. The certificate of official search must be availed for documentation and confirmed by the Society Credit Committee.
    • An application for consent from the National Land commission must be made. The letter of consent must be availed for documentation.
    • The land valuation must be done by Society approved valuers and an official valuation availed for documentation.
    • A valuation report shall be issued directly to Mhasibu Sacco by the valuer
    • All government fees pertaining to the property must have been paid up to date and a confirmation certificate/receipt availed to the Society.

  3. Charging of Property

    After the member has availed all the necessary documents, the Society shall advice the member to pick a lawyer from the pool of lawyers approved by the Society to undertake the charging of the property.

    • A charge must be prepared by a lawyer. The charge documents must be signed by the mandated signatories of the Society and sealed.
    • The charge must be done at the land’s offices and a certificate of the official search showing that the land has been charged to the Sacco availed to the Society.

Land Check List

Land Check List

The borrower is required to provide the following documents to facilitate

  • Original title documents of the parcel of land.
  • Original and copies of borrower’s PIN and ID cards;
  • 3 recent passport size photographs of the borrower;
  • Land Valuation report;
  • Postal address, telephone and e-mail address of the borrower.

In case the borrower is married he/she is required to provide the following:

  • Provide copies of the spouse’s PIN certificate and ID card;
  • 3 recent passport size photographs of the borrower’s spouse;
  • Duly executed spousal consent In case the borrower is not married he/she is required to swear an affidavit to that effect

Motor Vehicle Collateral Pledge

This constitutes motor vehicle not more than 15 years of age from the date of manufacture.

  • Value Motor vehicle comprehensively insured shall be acceptable collateral for loan.
  • Valuation of the vehicle shall be done by registered valuer appointed by Mhasibu Sacco and valuation report submitted directly to the Sacco.
  • Upon approval of the loan the ownership of the vehicle shall be registered jointly between the borrower and the Sacco.
  • The value used to secure loan is 50%

To facilitate joint registration of the motor vehicle between the member and the Sacco, the borrower shall avail the required documents to the Sacco office together with the loan application:

Charging/joint transfer of motor vehicle

After the member has availed all the necessary documents. The charge must be done through NTSA TIMS and a certificate of the official search showing that the motor vehicle has been charged to the Sacco availed to the Society.

Log Book Check

The borrower is required to provide the following documents: –

  • Original log book in the name of the borrower;
  • Copies of borrower’s PIN and ID cards;
  • 3 recent passport size photographs of the borrower;
  • Copy of valid insurance cover.
  • Letter of consent incase the document belong to the other e.g. spouse

Log Books Pledged by Third Parties/Spouses, the society will expect the following

  • Endorsement letters
  • Identification Card (ID) of the owners
  • Certificate of registrations in the case of a registered legal entity
  • Pin Cards for both the endorser and the applicant
  • ID cards for both the endorser and the applicant.

N/B; For married people where family items are used to secure a loan, it is important for the spouse of the Borrower consent to the loan.

SUBSTITUTIONS OF SECURITIES

To ensure that the Sacco’s position is not weakened as a result of substitution of securities;

  • Once a loan has been approved, no substitution of one security for another may occur without approval of the Credit Committee responsible for its original approval.
  • Substitution of any security may only occur after a new assessment process,

This will be followed by writing of a new letter of offer and full perfection processes.

Fixed Deposit Collateral

This shall consist of fixed monetary amounts in Kenyan currency held in the Society. Up to 100% value of the deposit at the time of loan may be offered as collateral. The requirements shall be as follows:

  • Such deposits once committed as collateral shall be locked and shall therefore not be available for withdrawal, transfer or any other purpose until the loan and interest so secured is cleared in full.
  • The member shall be required to do a letter instructing the Sacco to use fixed deposits in securing a loan.
  • The fixed deposit held after maturity shall continue earning interest.

Certificate of Completion

A member can use a certificate of completion to secure a loan so long us the land was bought through a Mhasibu housing and the title deed is not ready.
The guarantee value is the cost of land.

Requirements

  • Original Certificate
  • Jointly Registered

Certificate of completion Pledged by Third Parties/Spouses, the society will expect the following

  • Endorsement letters
  • ID cards for both the endorser and the applicant.

Guarantors

Money Market

(i) Unit trusts

  • The member must provide the statement showing the current contribution
  • Lien must be created
  • The value used as security is the current contribution (100%)

(ii) Nairobi Securities Exchange

  • The member must provide the statement showing the quantities
  • The member must fill the CDSC 5 form
  • The lien must be created on the shares
  • The value used is 50% of the market price.

Insurance Policy (Life Policy)

  • The member must provide the original policy
  • Lien must be created on the policy