CREDIT & THRIFT

THRIFT
& CREDIT

Building Savings; Creating Wealth

The primary objective of a cooperative society is to cultivate a savings culture in individual member’s life. It is an age-long established fact that nobody can escape poverty without a savings habit. Anybody that spends everything on consumption is just a step away from poverty and its various consequences, no matter how rich the person is today. The story of the prodigal son is instructive in this regard. No matter how much a man earns a percentage of it should be kept aside as savings.

CBN COOP has given her members ample opportunity to build their saving as active or retired member by monthly contribution of N10,000 and N5,000 respectively. Apart from securing their funds, it equally qualify them for annual savings bonus payable after every Annual General Meeting.

The Member savings of the Society has consistently grown approximately by 12% per annum as shown below

SAVINGS

SAVINGS BONUS

COOP CREDIT FACILITY

The society avails her member credit facilities for personal and project needs at a very moderate rate. The rates are subject to review every financial year. The prevailing rates for the year 2020 stand as follows:

Loan analysis by interest yield

	Tenor (months)	Interest rate
Normal loan	12	5.0%
Special loan	12	12.5%
Short term loan	6	6.0%
Short term loan	3	4.0%
Short term loan	1	3.0%
Commodity loan	12	5.0%
Investment loan	48	11.75%
LPO Financing	3	7.5%

LOANS

Loans may be granted to Members, subject to AVAILABILITY of funds and shall be for purposes, which in the opinion of the MC are productive or necessary, and in the best interest of the borrower.

Categories of Loans

The MC may grant such categories of loans as may be approved from time to time which may comprise, but not limited, to the following:

1. Normal Loan

The normal loan shall be granted to contributing members who have contributed for a minimum of 12 calendar months (One year)
The normal loan shall be granted up to a maximum of 2 times the net balance in their savings account.
A normal loan granted to a member shall be recovered within twelve (12) months.

2. Special Loan

Special loans may be granted to members who have been contributing for more than 1 (one) year.
The amount to be granted for such loan shall not be more than 5 times the member's net savings balance or any amount as the MC may determine from time to time, subject to availability of funds and the ability to pay within 12 months.

3. Short–Term Loans

Short-term loans may be granted to Members who have urgent needs subject to a maximum limit of 5 times their net savings balance or any amount as the MC may determine from time to time, provided fund is available and the borrower has the ability to pay within the specified terms.

4. Investment Loans

The Society may obtain funds from a Financial Institution, investing Members, or any other approved source(s) at favorable terms and lend to Members at tenure longer than One Year. The terms and conditions of the loan shall be determined by the MC.

5. Consumer Loan

The Society may facilitate the purchase of consumer goods at a favorable price and sell to its Members. The terms will be determined by the MC in accordance with prevailing situations and market conditions.

6. Project Financing

The Society may finance Members housing and other projects on such terms and conditions as may be determined by the MC from time to time.

7. Asset Acquisition Financing

The Society may finance Members acquisition of assets on such terms and conditions as may be determined by the MC from time to time.

Conditions for the Grant of Loans

No-loan shall be granted to:

Any person other than a Member of the Society;
Any member who has not made thrift savings under this Bye-law for a minimum period of 12 months;
Any member whose indebtedness at the time of the loan exceeds his maximum credit limit;
Any member whose proof of ability to repay is not available or inadequate;
Any Member without an eligible guarantor as may be specified for the category of loan being applied for.
Notwithstanding anything stated in this Bye-law, the Society shall not grant Loan to an unconfirmed staff.

Applications for Loans

All applications for loans shall be made to the MC. The MC shall put in place necessary procedures for the processing, review, and approval of loans. Appropriate channels have been established for the control and disbursement of loans within a reasonable time frame.

Loans to Members

No loan shall be granted to a Member earlier than 12 months of becoming a financial member of the Society.
Amount applied for shall be considered with due recourse to take-home pay for repayment purposes.

Maximum Credit Limit

The MC shall from time to time determine the maximum credit limit of each applicant for a loan
The credit limit shall be subject to the availability of funds, the principle of making credit available to as many Members as are qualified and the securities offered.

Security for Loans

Self-guarantee shall be required of Members who are taking equal to or less than his/her net saving balance.
The savings account balance constitutes the first collateral and basis for determining for loan to be taken by members
Guarantor(s) may be required from borrowers as the need arises to collateralize loans that may be granted to eligible Members.
Post-dated cheques duly authorized to the society and Standing Payment Instruction from banks may be required from members whose repayment from source cannot be ascertained
Insurance cover may be required for loan granted to certain categories of members where direct re-payment from source cannot be ascertained

Duties of Guarantor

A guarantor must be an active member of the Society and shall personally be responsible for:

Repayment of the loan if the borrower defaults.
Authentication of the particulars and details provided by the borrower(s).
Authorization of the society to off-set the loan guaranteed from the amount in his credit and from other monies due to him from other sources.

Administrative Charges on Loan

In case of default in repayment, a penal interest not less than an equivalent of the applicable Special Loan interest rate may be charged in addition to the original interest rate.
Applicable Administrative fee shall be charged for loan processing

Repayment of Loans

All Normal and Special loans shall be repaid within 12 calendar months. However, loans may be repaid or recalled before the expiration of 12 months.

Loan repaid before the end of the agreed tenor shall be entitled to refund of the unexpired interest already received by the Society. The amount to be repaid and applicable administrative charges shall be determined by the MC from time to time

Sources of Funds

The sources of funds for the Society shall be made up of:

(i) Membership registration fees

(ii) Check-offs from salaries and allowances

(iii) Interest on loans from members and non-members

(iv) Earning from other businesses of the Society.

(v) Shares subscription by members of the Society

(vi) Brokerage fees on loans, Commodity sales, projects

(vii) Funds raised or grants obtained from external sources;Government Institutions, Development Agencies, including the capital market, and

(viii) Other sources approved by the statutes/Bye-laws of the Society.

 
Savings

Ordinary Savings

Monthly Check-out from Salary. Every member shall endorse a letter of authority online for the deduction of his/her contribution from the monthly salary.

Special Savings

Members may make special savings with the Society and such shall not be used in the calculation of interest/loan until three (3) months after

Special Withdrawal from Savings

50% withdrawal from members savings balance provided he/she has no outstanding loan. It is interest-free and accessible four (4) times a year where necessary. Eligible to members who are up to 6months in the COOP

Minimum monthly Contributions

N5000 for Junior Staff, Retirees and Pensioners

N10000 for Senior Staff

N20000 for Management Staff

Benefits of COOP Savings

• Deduction is from Source

• Plan for targeted expenses, reduce or eliminate unnecessary expenses.

• Plan for future goals- education, training, etc

• Plan for emergencies

• Investment Planning

• Retirement Planning

• Wealth Management = Moderate to high yield returns

Non-payment of Savings

i. A Member who refuses to make savings for a consecutive period of 12 months shall have his accounts dormant and technically suspended.

ii. Where Membership is suspended for reason of refusal to make monthly savings, such Member shall not exercise his/her membership rights as enshrined in the Byelaws unless the account is reactivated.

iii. A Member whose membership is suspended for reason of refusal to make savings can have his account reactivated and rights restored upon payment of savings for at least six (6) consecutive months.

Withdrawal of Savings

i. No member can withdraw the whole of his regular savings except upon withdrawal of membership after giving a minimum of three (3) months’ notice to the Society.

ii. Savings withdrawal shall be allowed at a maximum of 50% of savings balance, provided the member have no loan running at the time of application and have saved continuously for a minimum of six (6) calendar months

iii. Withdrawal from regular savings shall be allowed at most once in an interval of 90 days.

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