Mwalimu Sacco loans: Types, requirements and interest rates

Mwalimu National is the largest African Sacco with its membership drawn from teachers in all the parts of the country. The institution aims at empowering and enabling tutors to access affordable financial services. One such product is the Mwalimu Sacco loans, which have far much lower interest rates.

Mwalimu National Sacco offers a wide range of loans to teachers and its members. All of them are suited for different types of financing and also have different interest rates as well as requirements. To choose the right credit, you need to have a clear understanding of the loans offered by this institution.

Mwalimu Sacco loan types

The following is a list of the financing options you have as a member. We have included the necessary requirements for loan approval and their respective rates.

BOSA loan products

Back Office Services Activities financing is made against your deposits. Products offered here include:

Wezesha loan

• The product is only for new members
• A loan interest rate of 13% will apply
• The maximum repayment period is 36 months
• A 2% processing fee is deducted
• The credit should be guaranteed fully
• Shares boosted will earn Mwalimu National Sacco dividends on a pro-rata basis

Emergency loan

This credit is only granted for unforeseen happenings or circumstances. Also, you can only access one emergency financing at a time. The following terms apply:

• An interest rate of 1% per month on a reducing balance is applicable
• It should be repaid within 24 months
• The multiplier here is x5 based on 1/3 of your net salary

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School fees loan

You can only apply for this for educational purposes. Only one school fee credit is issued at a time. The terms include:

• 1% interest rate per month based on reducing balance
• It should be repaid within 24 months
• The maximum limit you can obtain is five times your deposits. The amount is based on the 1/3 net salary rule.

Normal loan

This is a short term form of financing that will help you in meeting immediate financial essentials. The terms below apply:

• 1% interest per month on a reducing basis
• The maximum loan repayment schedule is 36 months
• You can only have a maximum limit of 3 times your deposits subject to the 1/3 salary regulation.
• Only one standard loan can be granted at a given time

Development loan

You can only take this medium-term loan for investing purposes. You cannot have more than one credit at a time.

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• 1.17% interest rate per month on a reducing balance basis
• It should be reimbursed within 48 months
• You can only access a maximum of 4 times your deposits where the a-third-salary rule will apply

Super loan

Super loan is long-term financing that should be used for investment purposes. The following terms apply:

• 1.20% interest per month
• A limit of 4 times your member deposits
• Should be paid back within 60 months
• You can only take one Super Loan at a time

Vision 84

Another long-term investment credit that Mwalimu Sacco offers is Vision 84. Its terms include:

• 1.29% interest per month on a reducing balance system
• Maximum repayment time is 84 months
• You can access up to 5 times your member deposits, and the 1/3 salary regulation applies

Mwalimu National Sacco FOSA loans

Front Office Services Activities (FOSA) has products that aim at providing affordable and essential banking services to meet all the teacher's demands. The products include:

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Karibu loan

Newly employed teachers and interns are the only groups that can access this fund. The following conditions apply:

• A 1.5% interest rate per month
• You should be a member
• The repayment period is within 90 days after you receive your first salary
• Newly employed TSC teachers can access a maximum of Ksh. 60,000, which will be disbursed in three phases of Ksh. 20,000 per month.
• Interns will only be issued with not more than Ksh. 30,000 paid in three Ksh, 10,000 tranches
• The recovery period for each installment is five months
• You are given 90 days grace period from the time you receive the last set of funds.
• It is repayable through your salary or any other legal finances.

You will need the following to qualify:

• A posting letter from the TSC
• A copy of your national identity card certified by the school deputy and principal
• A guarantor
• A copy of your TSC casualty returns
• Pay-point loan application form which should be signed by your school Deputy or Principal

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Salary in advance

If you have any emergencies in between the month before your monthly payments are issued, you can apply for this type of loan. The terms are as follows:

• It is repayable at the end of the specific month
• The maximum amount you can borrow is 80% your net salary or even S.A.Y.E
• The interest is 5%

FOSA instant credit type 1

Just like the name suggests, you will be given your credit amount instantly if you qualify. You should be ready to accept the following:

• Should be reimbursed within 30 months
• The rate is 1.5% per month based on reducing balance
• The limit granted is your S.A.Y.E savings times 10

FOSA instant credit 2

Type 1 and 2 differ as they have different rates, payment period, and other terms as illustrated below:

• An interest of 1.25% per month
• Should be repaid within 12 months
• The maximum financing granted is 16 times your net salary. The figure is also 10 x your S.A.Y.E savings

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Mwalimu Sacco mobile loans

Their go-mobile application enables you as a member to transact in the comfort of your office or home. You can perform all the banking tasks such as paying bills, buy airtime, transfer money not to forget getting a Mwalimu Sacco instant loan.

M-loan

If you need a quick loan without so much paperwork, M-loan is for you. The interest rate depends on your repayment schedule.

• One month at 4%
• Two months at 4%
• Three months at 4%

You can only take a credit worth 80% or less your net salary or even S.A.Y.E. The institution recovers the principal and interest funds every month.

Individual business loans

The types under this category are designed to help you as a Mwalimu entrepreneur start and grow your businesses. They include:

Individual loan

If you have a well-established business, you can access financing without the normal group requirements in many financial institutions. The minimum loan you can take is Ksh. 150,000 and maximum, Ksh. 5,000,000. The following regulations guide this product:

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• Rates of 1.25% every month on a reducing balance basis
• You should repay it between 36 to 60 months. The maximum period will highly depend on the amount given.
• You should secure it using securities such as logbooks, title deeds, and so forth.

Group loans

This type of business financing is disbursed individually within a group for the expansion of an already existing business. It should be in existence for not less than six months. The credit is based on the following tiers:

• Tier one of Ksh. 30,000 to Ksh. 150,000 payable in 12 months
• Tier two of Ksh. 151,000 to Ksh. 250,000, which should be paid within 24months.
• Tier three of Ksh. 251,000 to Ksh. 500,000 reimbursed in 36 months.
• A 1.33% interest per month is applicable for all of the above

You have to start from tier-one going upwards to three as your business grows. If you are successful on the third level, then you can move to borrow at an individual client.

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Motorcycle loan

To be eligible for this loan, you should:

• Have BOSA of not less than Ksh. 100,000
• Maintain a monthly contribution to your savings account of Ksh. 1,000
• Contribute 30% of the invoice price
• The logbook will be jointly registered with Mwalimu Sacco until you complete the repayment
• A comprehensive cover during the loan term is compulsory

Welfare services

Mwalimu National tries to ensure that you are healthy, comfortable, and have peace of mind. Since we are all not able to predict what will happen in the next microsecond, there are some measures put in place to support you in times of need:

Risk fund

• It is compulsory for everyone
• You pay Ksh. 300 per month

The funds will be used to pay last respect to any deceased family member as listed:

• Self - Ksh. 80,000
• Spouse - Ksh. 50,000
• Children (Maximum 4) - 20,000

Burial benevolent fund

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• Compulsory for all members
• Ksh. 150 per month

The following will be issued for a decent send-off:

• Self - Ksh. 60,000
• Spouse - Ksh. 55,000
• Children (Not more than 6) - Ksh. 35,000
• Parents - Ksh. 20,000
• Parents in-law - Ksh. 15,000

You should have a copy of a death certificate to make any claims. For a child, you need a birth notification or certificate and any other supporting document, such as a letter from the sub-chief.

Senior savers loan

The product is made to senior members who have accumulated up to Ksh. 1.5 million Back Office Savings. The 1/3 salary rule doesn’t apply. You only need to channel your business proceeds, pension, and any other cash flows through your Mwalimu Sacco account. This financing is best for a person who is nearing retirement or has retired. To qualify:

• Your total loans in the institution should not exceed 85% of your free deposits.
• Securities such as logbook and commercial title deeds are mandatory

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The product has the following features:

• Processing fee of 2%
• The maximum amount is Ksh. 15 million
• The repayment term is not more than 120 months.
• You must demonstrate your ability to repay and provide sufficient collateral and business appraisal

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How to apply for Mwalimu Sacco loans

You need the following:

• A duly filled application form, which can be obtained from the Mwalimu Sacco members’ portal downloads section.
• An original and most recent copy of your payslip. It should never be above two months old.
• Acceptable form of identification such as national ID card or passport
• Guarantors who are active members for at least three months. Both of you should have total shares equal to or more than the loan you have applied for.
• Your account should have been active for more than three months
• You can only borrow 3 to 6 times your savings depending on the 1/3 take home regulation.
• You should have security such as monthly remittance of your contributions and in some products title deeds and logbooks

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Present the application form and the supporting documents to any branch countrywide. Your loan will be approved within four business days if you have complied with all the terms. The amount shall be deposited in your FOSA account.

How do I know my account balance and loan application status?

• Log into your Mwalimu National Sacco portal
• Provide your Member Number and Password to log in
• Follow on-screen instructions to access your account status.
• You can also contact customer care representatives via telephone and email with the details in this write-up.

Mwalimu Sacco customer care contacts

For complaints and any questions, direct them through the following official communication channels:

• Head office: Mwalimu Towers, Hill Lane, Off - Mara Road, Upperhill.
• Postal address: P.O. Box 62641 00200 Nairobi Kenya
• Phone 1: +254 020 295 6000
• Phone 2: +254 709 898 000
• SMS number: 0721 270 944
• Email: mwalimu@mwalimunational.coop
• Website: mwalimunational.coop

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Mwalimu Sacco loans are the best for any teacher. Unlike banks, interests on existing loans are never adjusted upwards at any given time.

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Venic Nyanchama (Lifestyle writer) Venic Nyanchama is an editor with more than three years of working experience in journalism. She has an educational background in Journalism and Media Studies from the University of Nairobi, having graduated in 2014. Venic has worked on different platforms, such as Rumour Juice and Yen.com.gh. Her content encompasses celebrity biographies, education, guides, fashion, and gaming. In 2023, Venic finished the AFP course on Digital Investigation Techniques and the Google News Initiative. You can reach her via venicmwendwa@gmail.com.