"You dream,we actualize."
Mwalimu Business loan is designed to enable all Mwalimu Entrepreneur grow their businesses
MNS-SECURED LENDING PROCESS FLOW
Mwalimu National Sacco offers loans to its members where the member can utilize other forms of collateral besides guarantors. You can use property or a motor vehicle instead of guarantors to access a loan from the Sacco.
Who is eligible for a loan at Mwalimu National Sacco?
• Must be a member of the Sacco.
• Must be active i.e., having saved consistently for the last 3 months.
• Must be a member in good standing i.e., has no defaulted loan.
• Open and maintain Sacco FOSA account.
What documents are required to access a loan using collateral?
1. Completed loan application form counter signed on each
2. Copy of National Identity Card
3. Copy of KRA Pin Certificate
4. Copies of Security Documents in this case title deed, certificate of lease, certificate of title or conveyance or copy of logbook.
5. Three months recent pay slips/paystubs applicable to those in employment
6. Three months’ Salary Bank Statements
7. Letter of confirmation of employment for employed applicants.
8. Business registration certificates, Certificate of incorporation, Resolution to borrow by a limited liability company applicable to registered entities.
STEPS FOR SECURED LENDING-USING LAND
1. Applicant provides all the documents as requested by the Branch Business Credit officer.
2. Credit Officer reviews, and if all documents are submitted, shares a list of valuers & lawyers for members to select.
3. Member shares the selected valuer and lawyer after negotiating and agreeing on the expected fees.
4. MNS officially instructs the Valuer to undertake the valuation and property inspection/Due diligence on suitability for use as collateral.
5. Valuer submits the report to the Sacco credit officer.
6. Credit Sanction of terms and condition of the loan are issued to guide loan offer letter drafting.
7. Sacco drafts and issues Loan offer letter to the member for execution and attestation for lending purposes.
8. The member executes the offer letter notarizes the same and shares with the Sacco together with the original title.
9. The credit team, upon receipt of the documents, forwards to Legal Team for charging process to commence.
10. MNS Legal Team gives a go ahead to the credit team to proceed with disbursement once charging is completed.
11. Credit team ensures insurance is in place there is a property, and all conditions are met as set in the offer letter and disburses the loan to the member account.
Frequently Asked Questions
1. Why can’t the Sacco just appoint a valuer and a lawyer for the process? The cost of the lawyer and the valuer is borne by the member hence the member has to negotiate the rate directly for transparency.
2. I do not know any lawyers or valuers to enable me to choose from the list shared. What do I do? The Sacco has an approved list of valuers and can assist by setting up a conference call to enable conversations.
3. How long will it take for me to get the loan? The process takes a month due to the securitization process and external parties involved.
4. What portion of the value of the land will be used to secure the loan? For a developed property we take 75% of the valuation plus accumulated savings for the member. For vacant or undeveloped land in urban areas we take 60% plus accumulated savings for the member. For agricultural land we take 50% plus accumulated savings for the member.
5. What portion of the value of the Motor vehicle will be used to secure the loan? We take 60% of the valuation plus accumulated savings for the member, however where the application falls under asset the percentage might be up to 90% depending on the condition of the car.
6. Does year of manufacture affect use of motor vehicle as security? Yes, it does as the Sacco only allows motor vehicles within 12 years of year of manufacture to be used as security.
7. If using land as security that has property already built am I required to have the house insured? Yes, a member will be required to provide proof of comprehensive insurance of the property. The Sacco is also able to facilitate provision of the insurance at the member’s cost.
8. If using Motor Vehicle as security am I required to have it insured? Yes, proof of a comprehensive insurance is required to be provided before loan is disbursed. The Sacco is also able to facilitate provision of the insurance at the member’s cost.
9. Can I use a joint owned property or a third-party property as security? Yes, you can and the same procedure for securitization will apply, save that the charge will contain additional requirement for the co-joint owner to give his consent to the charge through an official affidavit and Personal guarantee and Indemnity.
Mwalimu Insurance Premium Financing
|Name: Mwalimu Insurance Premium Financing
|Terms & Conditions||
The asset being financed shall be jointly registered between Mwalimu National Sacco and the Borrowing Member before loan disbursement.
Where the Member is borrowing asset finance to invest in commercial business, the member must demonstrate experience of having been in that line of business and provide proof of; -
All assets financed by the Sacco shall always be comprehensively insured through MNS RIB Ltd during the loan term and MNS Interest noted as “Financier/First loss payee.”
All movable assets financed by MNS shall always be installed with GPRS tracking device by a tracking company in Mwalimu National Sacco Panel.
Vehicle valuation for used or imported vehicles will be undertaken at Members cost.
Costs associated with Insurance, Valuation and Installation of car tracking devices will be borne by the borrowing member.
- Receive up to 80% financing for brand new vehicles.
- Loan repayment period of up to 5 years for brand new vehicles
- Up to 70% financing for used commercial / personal vehicles.
- Loan repayment period of up to 3 years for used commercial / personal vehicles.
- Up to 60 % financing for used PSV vehicles.
- Loan repayment period of up to 2 years for used PSV vehicles.
- Minimum monthly income for eligibility - KES 40,000
- Insurance for vehicles / equipment will remain comprehensive through MNS Risk and Insurance Brokers Ltd for the period the asset is under finance unless exceptions are sought.
- Repayment period from 1 to 5 years
- Disbursement in cheque/RTGS in favor of the dealer/Vehicle vendor
- Security – Asset financed and both jointly registered between MNS and respective borrower.
- Asset documents lodged with the SACCO’s lending department and held in custody throughout the loan term.
- 2% Loan appraisal fee (one-off),2% insurance fee (one-off),Interest rate at 15 % yearly reducing balance basis.
ASSET FINANCING SCHEDULE-FINANCING OPTIONS
|ASSET TYPE||ASSET CONDITION||MEMBER TO FINANCE||MAX REPAYMENT PERIOD|
|Private/Saloon Cars||New||20%||5 yrs.|
|Commercial Vehicles (Prime movers, trucks, pickups, Vans)||New||20 %||4 yrs.|
|School Buses||New||15%||4 yrs.|
|PSV Vehicles (Tour Vans, Taxis, Hires)||New||30%||3 yrs.|
|PSV Matatu and Buses||Used||40%||2 yrs.|
|Tractors and related agricultural implements||
|Office Equipment’s (Computers, Printers, Servers,)||New||40%||3 yrs.|
|Industrial Equipment (Plant and Machinery)||New/Used||40%||3 yrs.|
|Contractor Equipment/ Earth Movers||
|Specialized Equipment’s – Medical, Lab||
- Fill loan application form
- Copy of Identification document
- Copy of KRA PIN Certificate
- Pro forma invoice/sale agreement of asset being financed.
- Six months Bank statement duly certified
- Sales agreement/Proforma invoice for asset being financed.
- Copy of Logbook for used assets.
- Latest 3-month payslips
- Contracts being serviced if any for commercial assets.
v Insurance premiums financing shall be arranged through MNS Risk and Insurance Brokers Ltd.
Kenya Mortgage Refinancing Loan Product
KENYA MORTGAGE REFINANCING LOAN PRODUCT
Mwalimu National Sacco as one of the Primary Mortgage lenders in partnership with Kenya Mortgage Refinancing Company (KMRC), has rolled out affordable housing mortgage scheme at competitive pricing. The Board approved roll-out of the product through a refinancing scheme for purchase of residential houses at Kisaju Park as phase one (I) of the implementation of mortgage lending solution to all the Sacco Members.
|Target market||All Mwalimu Members|
|Purpose of the loan||Purchase of a Residential House.|
|Maximum Tenure||Repayment period up to 25 years subject to borrower's retirement age (maximum 60 years.)|
9% per annum on reducing balance basis.
This is equivalent to KMRC rate currently at 5% plus 4% margin totaling to 9%. Any changes on the rate will be determined by KMRC rate and approval by MNS Board.
|Negotiation fee||1% one off.|
|Insurance||Property and life insurance cover by the borrower during the entire term of the mortgage. In case of failure to renew the insurance policy, the SACCO will renew and pass over the cost to the customer.|
|Valuation||The property must be valued, and a valuation report submitted. This property will be revalued after every three years. This will be done by Mwalimu National prequalified valuers.|
|Disbursement||Mortgage disbursement shall be made upon completion of the security perfection and the member meeting all conditions set out in the letter of offer.|
|Late payments||Late payments will attract a penalty of 2% of the overdue amount.|
Eligibility criteria for the housing mortgages
- The eligible property to secure the loan must either be:
- Owner occupied.
- Title residential properties
- Free-standing or apartment
- Properties occupied by close relatives of owner.
- The title must be free from any delinquencies and encumbrances.
- The maximum mortgage loan limit will be Ksh.8 Million.
- The tenure of the collateral: Full ownership and if Leasehold with a minimum of 40 years to expiry of the lease.
The New loan product takes effect immediately in all our FOSA branches through the Business Loans officers. For more details visit our website www.mwalimunational.coop and our FOSA branches countrywide.