Loans
Loans the way the 2024 rules ask
Since November 2024, the Lending Conditions Regulations (SI 108 of 2024) bind SACCOs. Akiba Ledger’s loan engine is designed around them, from the product to the last repayment.
Loan products with the guards built in
Each product sets its rate, term, fees, guarantors and how much a member may borrow. The engine refuses a product that breaks the rules.
- Reducing balance only for a SACCO, equal instalments or equal principal, with the rate shown per year.
- Total charges within the cap: interest, fees and charges at most the principal in a year.
- A PDM preset: the Parish Revolving Fund’s 6% a year, UGX 5,000 fee and UGX 1,000,000 limit, ready to use.
From application to payout
The steps a SACCO is expected to follow, in order, with each person’s part recorded.
- Application. Entered by an officer, or by the member in the app.
- Appraisal. Savings, shares, other loans and the loan multiple, three times free savings by default.
- Guarantors. Each is told in writing what they stand behind and agrees in writing or in the app.
- Committee. A majority vote, delegated limits, and insiders stepping out of their own loans.
- Contract. The written contract and key facts sheet, with the total cost of credit.
- Payout. To the member’s savings, cash, bank or mobile money, with five working days to cancel.
Guarantors
Two guarantors by default for any part of a loan above the borrower’s free savings. Each guarantor’s free savings are held as the security, up to three active guarantees each. Board members, staff and the loans committee cannot guarantee.
Repayments and arrears
Repayments clear penalties, then fees, then interest, then principal, unless your SACCO sets another order. An overpayment goes to the member’s savings.
- Interest to the day on early settlement, with no early-settlement fee.
- Penalties at most half the monthly rate, on overdue principal only, never compounded.
- Provisions on the regulation’s bands: 1, 5, 25, 50 and 100%, with interest held in suspense from substandard on.
Top-ups, rescheduling and recovery
A top-up or a rescheduled loan keeps its history and needs the member’s written consent. A write-off and any later recovery are journals like everything else.
Questions about loans
More on the questions page.
Can a SACCO still charge flat interest?
Not in office mode. The engine offers the reducing balance only, as SI 108 of 2024 requires of SACCOs. Savings groups in group mode keep their usual monthly service charge, as self-help groups are exempt.
Can the SACCO choose where a loan is paid?
Yes. Each product lists the channels it allows: the member’s savings account, cash, bank or mobile money. The officer picks one for each loan.