THE CREDIT SUB-COMMITTEE

The Credit Sub-Committee consists of three of the management committee members i.e.

• Chairman,
• Secretary and a
• Member

Functions of the Credit Committee

The credit committee appraises all the loans based on loan/credit policy set forth by the management committee and approved by general meeting of the society.

a) The Credit committee inquires carefully/diligently into the character and financial condition of each applicant for a loan, and his/her guarantors, if any, to ascertain his/her ability to repay fully and promptly the obligations incurred by him/her

b) To determine whether the loan is for a worthy purpose and whether it will benefit both the borrower and the Society

c) The Credit Committee makes appropriate reports to the Management committee

d) The Credit Committee may as its discretion appropriately delegate part of their responsibilities to any employees such as the Credit Officers where necessary to facilitate loans processing

e) Loan applications from the Credit Committee members or Loans Officers is considered by the Management Committee

f) The Credit Committee must ensure that the loans are repaid as per the loan agreements.

g) The credit committee shall inquire into the character of the applicant to -:

a) Ensure that he/she is trustworthy, prudent and his/her track record in servicing previous loans is good.

b) Check references with other Sacco, and other financial service providers by way of seeking opinion on his/her credit -worthiness.

c) To find out If the loan applicant is clinically certified to be of unsound mind, then, he/she should not be considered for a loan since his/her capacity to get into a binding legal contract is compromised

Frequency of the Credit Committee Meetings

a) The credit committee holds meetings as the business of the society requires, at least once a month

b) In order to make a binding decision, all the three-committee members must be present in a meeting to approve the loans.

c) In the absence of quorum in a credit committee meeting to carry-on its business, the loans shall be approved by the Management Committee

d) Minutes of Credit Committee meeting for every sitting on all loans approved shall be filed and retained in the Society’s files as permanent records.

e) The Credit committee shall maintain a comprehensive loans Register

Delegation

The Credit Committee may delegate some of their functions to the Manager or any other officer of the Sacco e.g. Loan/Credit officer to facilitate the efficient processing of loans.  The Credit Committee can delegate authority but cannot delegate responsibility.  The full committee meeting must ratify delegation by credit committee.