a) Loan Tenure
The loan term shall be as defined in the loan product applied for. Example: A development loan secured by a title deed shall run for a maximum of 4 years (48 months) as per the development loan terms.
COLLATERAL BASED LENDING
Collateral Based Lending, means substituting guarantors with acceptable title deeds to secure BOSA Loans.
BENEFITS TO MEMBERS:-
- Shall help members requiring huge loans and may not get sufficient guarantors to secure the loan with acceptable title deeds.
- Enhance confidentiality for members who may want to borrow without involving guarantors.
- Assist members consolidate loans depending on whether the value of the collateral allows.
- Gives our members freedom of choice on the type of security to use for their loans.
TERMS & FEATURES OF COLLATERAL LENDING:
b) Interest Rate
Interest rate shall apply as per the terms of the loan product applied for. Example: A Jisaidie 72 facility secured by way of title deed shall attract an interest rate of 13.8% p.a.
c) Multiplier Effect
A maximum of 4 times members' deposits as per existing BOSA loans policy.
d) Loan To Value Ratio
(Maximum loan amount one can borrow against the collateral)
- Maximum 80% of value for developed property.
- Up to 70% of value for undeveloped property.
e) Admissible Security
- Security shall be by way of title deed or a certificate of lease for a property located within the municipality of any County in the country.
- Exclusions: Agricultural, community and ancestral land may not be considered as suitable security.
f) Process Flow
- Member demonstrates ability to pay and a site visit is conducted; a Letter of Intent (LOI) is issued to facilitate valuation of the proposed collateral.
- If the valuation confirms the security is suitable and sufficient, a Letter of Offer (LOO) is issued to the member.
- The member returns the LOO duly signed and witnessed by an advocate and commissioner of oaths.
- The executed LOO and original title deed are forwarded to the Society’s advocate to register a first-ranking charge in favour of the Society for amounts equivalent to the loan.
- After the charge is in place and confirmed by a post-search charge, and documents are declared in order by the Society’s Legal Office, the loan is disbursed in full into the member’s account.
- Once the loan is fully repaid, the Society returns the original title deed and charge document to the member so they may process discharge of charge at the lands office.
- The costs of valuation, title deed registration, stamp duty, legal fees and any other incidental costs shall be borne by the member; this must be communicated clearly from the onset.