BUTSOTSO EAST, SHIKOTI MARKET TRADERS SAVING AND CREDIT

CO-OPERATIVE SOCIETY LIMITED

Cooperative society admitted to membership after registration in
accordance with the By-Laws.
“Deposits” shall mean a sum of money paid on terms under which it
shall be repaid, with or without interest or premium, and either on
demand or at a time or in circumstances agreed by or on behalf of
the person making the society to receive it at the risk of the society
receiving it.
“A nominee” means a person appointed by the member to inherit
the shares, deposits and other interests in the society upon the
death of that member
3.2 In this By-laws where the masculine gender is referred to, it shall
be construed to include the feminine gender.
3.3 Any questions concerning interpretation of these By-laws or any
matter not provided for therein, errors and commissions shall be
referred to the commissioner.
4.OBJECTS
4.1 The objects for which the society is established are to organize
and promote the welfare and economic interests of its members.
4.2 In particular the society shall undertake:
To promote thrift among its members by affording them an
opportunity for accumulating their savings and deposits and create
thereby a source of funds from which loans can be given to them
exclusively for provident and productive purposes, at fair and
reasonable rates of interest, thereby enabling them to use and
control their money for their mutual benefit.
To ensure personal growth through the introduction of new products
and services that will promote the economic base of the members.
To ensure progress of members and the society through continuous
education programs on proper use of credit, reduction of poverty,
human dignity and cooperation.
To apply the cooperative principle of cooperation among
cooperatives in order to promote members interests. In furthermore
to the objects the society shall affiliate to the relevant National
cooperative Union and Apex Society.
4.3 For the attainment of the above objects, the society may do act
and things that are permissible under the act, Rules and these By-
laws including but not limited to acquire property and chattels and
doing all such other things as are incidental or consequential to the
economic enhancement of its members interests provided such act is
approved by the members in a General meeting.
5. COOPERATIVE PRINCIPLES
In order to achieve its objects the society shall act in accordance with
the following cooperative principles and relevant values.
5.1 CO-OPERATIVE PRINCIPLES
Voluntary and open membership
The society shall always be guided by the principal of voluntary and
upon membership in its member recruitment drive without political,
ethnic, religious, gender or social discrimination.
Democratic member control
The society will be fully controlled by members who will have equal
voting rights on the basis of one member one vote.
Economic participation by member
Members shall contribute equitably to the capital of the society and
shall share in the results of its operations.
Autonomy and Independence
The society shall operate on mutually acceptable terms with its
stakeholders who will ensure its autonomy and independence.
Education, training and information
The society shall foster reciprocal on going programs for members,
leaders, staff and the community so that they can reach and learn
from each other or from the appropriate resource persons in
understanding and carrying out their respective roles.
Cooperation among cooperatives
In order to better serve the interests of the members and the
community, the society shall actively cooperate with other
cooperatives locally, regionally, nationally and internationally.
Concern for community in General
The society shall show concern to the community in which it exists
and operates.
5.2 COOPERATIVE VALUES
The values shall be self-help, mutual responsibility, equality and equity. It shall practice, openness
and social responsibility in all its activities.

6. MEMBERSHIP

Membership shall consist of:

a) Original members who sign the application for registration.

b) New members subsequently admitted in accordance with their by-laws.

7. QUALIFICATION FOR MEMBERSHIP

A person who possess the following qualification shall be eligible for membership:
(a) Is within field of membership consisting of the following common bond, a member of Market
Traders Group.
(b) Is a resident or occupies land within the society area of –Lurambi operation namely Kakamega
county.
(c) Has attained the age of 18 years.
(d) Is of good character and sound mind.
(e) Pays the entrance fee and share capital as prescribed in these by laws.

Provide that no member shall belong to more than one Sacco society having a similar object
operating within the same area of operation.

8. APPLICATION FOR MEMBERSHIP

Every application for membership shall complete an “application for membership” form .This form
shall be drawn to show all the information required for the purpose of registration of members.

9. ADMISSSSION INTO MEMBERSHIP

1. As applicants shall be admitted to membership on application upon payment of entrance for

Kshs. 200 and for such other minimum shares as shall be fixed by the general Meeting from time
to time.
2. Upon admission the member’s name shall be entered in membership register and membership
number issued.
3. The shall sigh or make a thumb mark in the register of members in the presence of two
members of the committee to indicate his / her acceptance of the By-Laws of the society.
4. Members shall be admitted by the Committee subject to confirmed by the next General
meeting.
5. The member shall pay a copy of the society’s By-Laws at its actual cost to the society.
10. REFUSAL OF ADMISSION
The committee may refuse admission to a person after assigning reason for their decision, such a
person, if otherwise eligible for membership shall the right to appeal to the next General
Meeting through a member.
11. RIGHTS OF MEMBERS

A member of the society shall have the right to:

(a) Attend and participate in decision making at all General Meeting of the society and vote,
(b) Be elected to the organs of the society, subject to these By-Laws,
(c) Enjoy the use of all facilities and services of the society subject to the society’s By_laws;
(d) All legitimate information relating to the society , including internal regulations ,registers,
minutes of General meetings and supervisory committees reports, annual accounts,
inventories and investigation reports, at the society’s registered office .

12. OBLIGATION OF MEMBERS

A member of the society shall have the obligation to:

i. Observe and comply with all the society’s by-laws and decision taken by the relevant
organ of the society.
ii. Buy and pay for shares or make any other regular payments provided for in these by-
laws;
iii. Meet the debts of the society in the case of insolvency in accordance with provision
of the Act and these by-laws

13. MEMBERS PERSONAL STATEMENT

The society use “check of the system’ standing orders or cash for payments or members shares,
deposits and loan repayments. However, when direct payments have to be made, they shall be paid
directly into the society‘s bank account and a receipt issued by the society on submission of the bank
slip,

Every member shall receive regular statements and at least once every three months, which shall
contain particulars of membership, shares, deposits and loan transaction with the society.

14. CESSATION OF MEMBERSHIP

Membership in the society shall cease or deemed to have ceased regard to any member from the
date of

I. Death

ii.Withdrawal

iii.Expulsion

Iv.Being certified to be of unsound mind

V.Transfer of shares to another member

vi. Failure to remit share contribution and loan repayment for a continuous period of six months
without valid reasons or leave of the society

Vii.Ceasing to hold qualification for membership as specified in these by- laws provided that
members who have lost the common bond may retain their membership.

SUSPENSION

15.1 The committee may suspend a member subject to the decision of the General Meeting to expel
who:

(a) Fails to fulfill his/her obligations to the society whether stated in these by-laws ,general internal
regulations a resolution of the General Meeting or in contravention of any other legal document ,
provided such a member has been called upon to do so but has failed .

(b) Is a member of another society having similar objects?

(C) Acts in my manner prejudicial to the interest of the society.

Provided that, no member shall remain in suspension for a period of more than 12 months.

16. PROCEDURE OF SUSPENSIOIN AND EXPULSION

(a) Upon formal and written proof that a member has committed a violation punishable by
expulsion, the committee shall serve a thirty (30) days written notice to the member starting the
reason (s) for the proposed expulsions and requiring him/her to file a defense.

(b) Upon the expiry of the 30 days and taking into consideration the members defense if any, the
committee shall initiate administrative inquiry and make decision on its findings within 15 days. The
committee may:

i. Suspend the member pending expulsion by the General meeting or

ii. Impose any other punishment as provided for in the applicable law.

C) The suspended member may appeal to the General Meeting if not satisfied with the decision of
the committee.

d) The committee shall present their findings to the next general meeting which may either lift the
suspension or expel the member.

e) A member who is expelled from the Sacco society shall have the right to appeal to the tribunal

17. WITHDRAWAL FROM THE SOCIETY

A member may at any time withdraw from the society by giving at least sixty (60) days written notice
written to the committee.

18. PAYMENT ON CESSATION OF MEMBERSHIP

18.1 On cessation of membership, a person shall be refunded the following amounts

a) Any dividends or interests due to him prior to the date membership ceased and

b) Any other sums held by the society on his behalf after deductions of any sum owed to the society.

19. NOMINEE

Every member shall nominate in writing one or two persons as nominee(s).The nomination shall be
attested to by two witnesses who are members of the society. The names of such nominee(s) shall
be entered in the nominee register.

Provided that a member shall have the right to change his/her nominee(s) in writing in the presence
of two attesting witnesses who are member of the society.

20. PAYMENT TO NOMINEE

The society after obtaining such documentary proof of the death of a member as it may consider
necessary, shall pay to the death of a member as it may consider necessary, shall pay to the nominee
the value of the deceased members deposits, interest and dividend after deduction monies owed to
the society if any.

21. ADMISSION OF NOMINEE

A nominee may be admitted to membership of the society if qualified .The deposits, interest and
dividends due to the deceased member shall be transferred to the account of the nominee

22. SOURCES AND APPLICATION FUND

22.1 The funds of the society shall consist of:
22.2 Entrance fee
a) An unlimited numbers of shares of ksh 100/= each
b) Deposit from members and loans from non-members
c) Administration fee and penalties
d) Stututary reserve fund and any other reserve fund as be kept by the society
e) Any surplus resulting from operation of the society
f) Any donation, gifts from other bodies, organization and individuals
g) Funds obtained from lawful miscellaneous sources

22.2 The funds of the society and only be applied to the promotions of the stated object as set forth
in these by laws and shall be invested in:

a) Such investments and security as are authorized for the investment of trust funds.
b) The shares of any other co-operatives society
c) Any bank, license under the Banking Act.
d) The stock of any statutory body established in Kenya or any other limited liability
company incorporated in Kenya or any other manner approved by a resolution at
the general meeting of the society
e) Loans granted to the members
 23 SHARES

Every member should hold at least 10 shares of ksh 100/= each shall be fixed by the
general meeting. However no member shall hold more than one fifth of the total shares
of the society

24 TRANSFER OF SHARES

a) With the approval of the committee, a member may at any time transfer
shares to another members but not to another person, such transfer must
be in writing and nominal value
b) All transfers of shares shall be registered with the society and no transfer
shall be valid unless so registered. A fee of kshs. 200 shall be payable to the
transferee

25. LIABILITY

a) The liability of a member shall be limited to the nominal value of the shares
held by him
b) In the event of liquidation, where available funds are insuffient to pay the
full nominal of the shares held by members the funds shall distributed pro-
Rota among the shareholders according to the amongst of shares by each.

26. POWER TO BORROW

a) Loans maybe be obtained from non-members subject to the

maximum amount and terms approved by the General Meeting and
Commissioner for co-operatives development
b) For the security of any loses may grant a charge over its assets. The
authority to grant a charge shall be reserved to the General
Meeting. Subject to approval by the commissioner for the
cooperative development.
c) The rate of interest on loans shall not exceed the current market
rate

27. RECEIPTING OF MONEY

a) Money received on account of shares, deposit, loans, interest fees

or fines shall be evidenced by a printed receipt in a form to be
approved by Committee. Every member paying any money to
immediate notice of such fact shall be given to the Treasure who
may be authorized by the committee to issues a duplicate receipt at
a reasonable fee
b) The committee may require the members to sign an indemnity to
protect the society against any loss dues to the issuance of such
duplicate

28. PAYMENT/ DISBURSEMENT

Payment made by the society shall be evidenced in writing in a form

approved by the Committee.

29. STATUTORY RESEEEEEERVE FUND

 a) The society shall pay into the Reserve Fund maintained of the
provision of Section 47 of the Act and Rules one fifth (1/5) of any
net surplus resulting from the operations of the society during a
financial year.
b) The Reserve Fund of the society shall be invested in the manner
provided for in these by –laws
c) The Reserve Fund shall be indivisible and no members shall be
entitled to claim a specific shares of it.
d) No withdrawal shall be made from the reverse fund of the society
without a resolution from the General Meeting and written
approval from the Commissioner

30. GENERAL MEETING

30.1 The supreme authority of the society shall be vetted in the General Meeting of
Members.

i. An annual General Meeting shall be converted within our months after the
end of the society may be held when convened by:
a. The Committee
b. The Commissioner
c. The Committee within 15-days of receipt of written request of the
members. The request must be deposited by registered mail at the
Society office within normal working hours.
d. The members in (b) iii above , if the committee fails to co9nvene a
meeting within fifteen days of receiving the request, The members
of the society, starting the object and reasons for the meeting and
the fact the committee has failed to convene the meeting

30.2 Any business not completed at the Annual General Meeting, may be taken up
at a subsequent special General Meeting of the society.

31. DUTIES OF GENERAL MEETTING

31.1 The General Meeting shall have the powers and duties prescribed in the Act, Rules and
these By- laws. It shall:

a. Consider and confirm the minutes of t5he previous meeting

b. Consider report of committees, the commissioner or his/her representatives and the audited
accounts on the society activities during the past financial year
c. Consider and resolve on the manner in which any available surplus shall be distributed or
invested. Subject to the act and rules.
d. Elect or remove members of the Committee and the supervisory Committee, subject to the
act Rules and these By- laws
e. Fix the indemnity for the elected Committee members and management staffs
f. Consider recommendation from the committee, against suspension and expulsion of
members.
g. Consider appeals against refusal of membership by the committee
h. Confirm or reject admission of new members by the committee
i. Fix the maximum liability which the society may incur in loans and deposit from both
members and non-members
 j. Approve the estimates of income and expenditure for the financial year following the
General meeting.
k. Fix the honoraria, if any for officers or employees of the society
l. Decide on the management structure including the establishment of branches to facilitate
efficient and cost effective delivery of service to members.
m. Appoint banks, auditors and advocates of the society for the ensuring year
n. Affiliate the society in national cooperative organization for SACCO society and the Apex
Society, subject to approval of the General Meeting.
o. Transact any other business of the society for which notice has been given to members in
the manner prescribed in these By –Laws

31.2 All members have a right to attend the General Meeting and participate in its deliberation:
however they may be required identity themselves.

32. RECORDS OF BUSINESS

All business discussed or decided at the General Meeting shall be recorded without erasures and
corrections in a Minute Book which within one week of the meeting, shall be signed by the Chairman
of the meeting and at least one other committee members who was present of the meeting, to
indicate that in their opinion the minutes are a true and complete record of all matters discussed or
decide at meeting.

At the next meeting after approving any alterations or variations which shall be written immediately
below the above signatures and not as alterations to the original record, the meeting shall by
resolution authorize the chairman to sign and date the final record.

33 .NOTICE OF MEETINGS

a) The General Meeting shall be convened by giving at least 15 days written notice to the members.

b) The Honorary Secretary shall take all usual steps to publish the notice of the meeting in public
places, on the society notice board(s), in local newspaper or news sheets including the media or any
other mode decided by the members.

c) All notices shall include a statement of the business to be dealt with.

34. QUORUM

Except when convened by the commissioner, the presence of at least 50 members or a fourth (3/4)
of the total membership, whichever is less .shall constitute a quorum for the conduct of business at
the General Meeting. When a quorum is not attained the chairman shall adjourn the meeting and fill
a date for another meeting within one month, which shall be advertised as prescribed time of the
meeting.

35. ELECTIONS
a) With every notice of the General Meeting Convened in accordance with these by- laws, where
elections will be held, the committee shall notice the members of the vacancies arising in both the
Committee and the Supervisory Committee.

b) The society shall have an electoral board composed of five (5) members, none of whom shall be
facing elections. The area representative of the commissioner shall be the chairman of this board.

c) Any candidate wishing to participate in the election shall be required to apply to the electoral
board 10 days to the date of elections.

d) Nominations of candidates shall be from successful vetted applicant only

e) The society shall demarcate electoral areas to ensure equitable representation thus ensuring that
the elected officials represent the face of the society s area of operation.

f) All elections shall be secret ballot

g) No member shall be entitled to note by proxy.

h) Irrespective of the number of shares held by him, no member shall have more than one vote.

i) Election petition shall be filed to the returning officer within 48 hours from the date of election

35.1 Within fourteen (14) days of the elections, the Honorary Secretary shall forward to the
commissioner the names and addresses of all persons elected.

35.2 A new committee elected at the General Meeting shall not assume office unless they have
satisfied the requirements of the act, Rules and these by-laws.

36. MANAGEMENT COMMITTEE

a) The committee shall be the governing body of the society elected from the general membership
and shall consist of nine (9) members .it shall include chairman, vice chairman, Treasurer and
secretary all of whom shall be elected by the committee from amongst the members of the
committee.

b) Members of the committee shall hold office for a period of three years provided that, one-third of
the committee members shall retire every year but will be eligible for election.

c) Where the membership of the committee falls below five the committee shall coopt qualified
member(s) into the committee until the next General Meeting.

37 ELIGIBILITIES FOR MEMBERSHP TO THE MANAGEMENT COMMITTEE

No person shall be eligible for members in the committee of the society if he /she:

a) Is not a member of the society;

b) **********************************
42. DELEGATION TO EMPLOYEES

a) The committee may delegate to any employee of the society such duties as it deems fit.
b) Nothing in (a) above shall absolve the committee from its responsibility of running the affairs
of the society in a proper and businesslike manner.

43. INDEMNITY

All committee members shall each provide an indeminity of an amount approved by the General
Meeting. A duly completed form V in the schedule to the Rules shall be lodged with the
Commissioner within 14 days upon election to the Committee.

44.DECLARATION OF WEALTH

Ever Committee member shall within 30 days of being elected declare wealth to the Commissioner
in the prescribed manner.

45. LEGAL STANDARD OF CARE

In the conduct of the affairs of the society, the members of committee shall exercise the prudence
and diligence of ordinary men of business and shall be held jointly and severally liable for any loses
sustained through any of their acts, or failure to act, which are contrary to the Act, the Rules, the By-
laws or the directionsof the General meeting.

46. SUSPENSION FROM THE MANAGEMENT COMMITTEE

a) The Commissioner may suspend from duty any Committee member charged in a court of
law with an offence of the matter.
b) The majority of the Committee members may suspend a Committee members may suspend
a Committee member for;
i. Failure to disclose vested interests
ii. Any other good cause
iii. Subject to ratification by the General Meeting

47. REMOVAL FROM THE MANAGEMENT COMMITTEE

A member of the Committee shall cease to hold office if he/she :

a) Ceases to hold qualifications of a Committee member as specified in the Act, Rules and these
By-laws;
b) Is removed by the Commissioner under the provisions of the Act:
c) Is voted out by two-thirds majority of the society members present and voting at the
General Meeting.

48. EXECUTIVE OFFICERS

The Chairman, the vice-chairman, the Treasurer and the Honorary secretary shall be termed as the
“Executive Officers of the society” and shall be elected at a meeting of the Committee held within
seven days after election at the General Meeting.

49. THE CHAIRMAN

The chairman shall:

 a) Preside at General Meetings, Committee meetings and joint meetings with the supervisory
committee.
b) Perform such other duties as directed by the Committee, not inconsistent with provisions of
the Act, the Rules and these by-laws

50. THE VICE CHAIRMAN

The vice-chairman shall perform;

a) The duties of the Chairman during his/her absence

b) Such other duties as directed by the committee

51. HONORARY SECRETARY

The duties of the Honorary Secretary are to:

a) Cause minutes of the General Meetings, Committee meetings and joint meetings with the
Supervisory Committee to be recorded.
b) Ensure that notices of the meetings are prepared and sent out.
c) Ensure that the society’s correspondence is promptly and correctly attended to
d) Perform such other duties as may be directed by the Committee

52. TREASURER

The duties of the Treasurer shall be to:

a) Generally manage or cause to be managed the financial affairs of the society in a competent
manner;
b) Ensure that a proper record is kept of all monies received and paid out by the society, its
assets, liabilities, capital reserve and its income and expenses;
c) Ensure the safekeeping of the Society money, securities and books of accounts
d) Ensure that all payments and expenditures are duly authorized
e) Ensure that within ten days after the closure of each month, a financial statement showing
the condition of the society’s finances at the end of preceding month is prepared and
submitted to the Committee for discussion; and
f) Ensure compliance with all directions of the Committee, the Act, the Rules and these By-laws
on all financial matters.
g) Cause to be presented, a statement of the ensuing month’s cash flow
h) Ensure sufficient funds are available for loans.
i) Perform such other duties as may be directed by the Committee

53. SUB-COMMITTEES

a) Sub-committees shall consist of persons drawn from the committee

b) The Committee may delegate to the sub-committee some of its duties under these By-laws
as it deems fit
c) These sub-committees shall convene as directed by the committee.

54. EDUCATION SUB COMMITTEE

The Education Sub Committee shall consist of three members including the vice-chairman who shall
serve as its chairman . Its duties shall be to;
 a) Organize education programs for members, committee members, staff and the general
public.
b) Ensure that both the committee members and the staff are well trained and prepared for
the tasks they are entrusted with at the society.
c) Create cooperative awareness to the general public.

55. TENDER SUB COMMITTEE

The tender committee shall consist of three members of the committee and any other officers.

56. CREDIT SUB COMMITTEE

The Credit Subcommittee shall consist of three members of the committee, none of whom shall be
an executive officer. Its duties shall be to:

a) Hold regular meetings as the business of the society may require but at least once a month.
b) Vet Loan applicants and their guarantors and their ability to service their credit
requirements.
c) Assist members solve their financial problems.
d) Maintain records of their deliberations on loans.
e) Forward its loan recommendations to the committee for approval.

57. SUPERVISORY COMMITTEE

a) The society shall have a supervisory committee consisting of three members each elected at
the General Meeting for a period of three years and one member of the supervisory
committee shall retire annually. No person who has been in the committee within two years
preceding the date of the anticipated election shall be eligible for membership of the
supervisory committee.
b) The supervisory committee shall:
i. Hold quarterly meetings for joint meetings with the committee
ii. Have qualifications similar to those of committee members
iii. Be required to have knowledge of accounts
iv. Be removed by a resolution of the General meeting

58. DUTIES OF THE SUPERVISORY COMMITTEE

58.1The duties of the supervisory committee include:

a) Counterchecking the effectiveness of the society’s internal control systems through:

i. Preparation and presentation of periodic reports to the committee during joint meetings.
ii. Preparation of annual report to the General meeting
iii. Submission of its reports to the commissioner

58.2 The supervisory committee shall not perform the duties or exercise any of the powers of the
committee.

58.3 The supervisory committee shall be held liable for any loss incurred due to their negligence in
performing their duties

59. THE MANAGER

The Manager shall conduct the business of the society subject to overall control of the committee.
60. DUTIES OF THE MANAGER

The manager shall:

i. Advise the committee and other committees and other committees in formulating,
preparing and implementing long term policies and programs of the society.
ii. Supervise the work of all staff and ensure that the business that the business of the society is
conducted in a proper manner.
iii. Ensure that proper books of accounts, records and returns are kept and that regular
financial, statistical and operational information is prepared and submitted to the committee
and other committees and also to the commissioner.
iv. Be responsible for the security of the funds and assets of the society.
v. Ensure that all statuary deductions such as National Social Security Fund (N.SS.F). National
Hospital Insurance Fund (N.H.I.F). Pay as you Earn (P.A.Y.E) etc. are correctly calculated and
that all the amounts due and the necessary returns are submitted by the due date.
vi. Ensure that rent, rates, levies and debts due from and to the society are paid by the due
date.
vii. Recommend to the committee the filling of any vacant position or dismissal of any staff
member who is not performing his/her duties properly.
viii. Countersign the society’s cheques, contracts and other documents.
ix. Attend general and committee meetings as an ex official.
x. Perform such other duties as may be assigned to him by the committee.

61. BOOKS OF ACCOUNTS AND RECORDS

The society shall keep up to date and in a proper businesslike manner such as books of accounts and
records as stipulated in the Act, the Rules and in particular:

a) A register of members showing in respect of each member;

i. Name, age, date of application for membership, address and occupation
ii. Date of admission to membership
iii. Date of cessation of membership
iv. Name and particulars of nominees, and
v. Any other information as may be required by the society from time to time.

b) Minute books giving details of proceedings of committee, joint management and supervisory
committee, supervisory committee meetings and all other meetings held in accordance with these
By-laws.

c) Minute book giving details of proceedings at the general meetings

d) A cashbook showing the details of all monies received or paid by the society.

e) A general ledger containing such accounts as is necessary to reflect the business of the society.

f) A personal ledger for each member showing his/her transactions with the society

g) A register of assets and property

h) A register of loans showing in respect of each loan number, name of the borrower, the amount
borrowed, the purpose of the loan, the due date of the repayments and the date of repayments are
complicated.
i) Such other books and records as the committee may decide or that the commissioner may
prescribe.

62. REGULATIONS

a) The committee may make such regulations, not consistent with these By-laws, as they deem
necessary for the conduct of the society’s business. The regulations shall be recorded in the
minute book and posted on the society’s notice board and shall come into force when and as
determined by the committee.
b) The society shall formulate a code of conduct for good governance.

63. AUTHORIZATION TO SIGN DOCUMENTS

a) All documents, contracts and cheques shall be signed on behalf of the society by any three
of the following:
i. Chairman
ii. Vice chairman
iii. Secretary and
iv. Treasurer

b) The manager shall countersign all the documents

c) The committee may authorize any other officer to sign the society’s documents

64. FINANCIAL YEAR

The financial year of the society shall be from 1st January to 31st December

65. DISPOSAL OF SURPLUS FUNDS

Subject to the act and rules, the net surplus resulting from operations of the society during any
financial year shall be disposed off as follows:

a. 20% (1/5) shall be credited to the Reserve Fund

b. The balance may be disposed off as decided the General Meeting for:
i. Paying dividends and interest on shares and deposits
ii. Being forwarded to Education fund or any other fund of the society including the
appropriations.
iii. Paying honorarium to committee members
iv. In any other way approved by the General Meeting

66. LOANS

a) The society shall have a loan policy approved by the General meeting
b) All loans shall be approved by the committee
c) Loans shall only be given for worthy purposes that benefit the borrower
d) The rate of interest on loans shall be determined by the General meeting on
recommendation of the committee

67. APPLICATION FOR LOANS

a. All loans shall be applied for on forms provided by the society

 b. The loan application in each case shall set forth the amount applied for, the purpose for
which the loan is desired , the terms of repayment, the security of any and such other
information as the committee may require.
c. All applications for loan and reports there on shall be field as permanent records of the
society.

68. LOANS GRANTING

a) Loans shall be granted by the committee in respect to the credit limit approved by the
General Meeting
b) No loan shall be granted except for a specified and approved purpose, for a definite period
and at a fixed rate of interest
c) No loan shall be made to any member in excess of 5% of the society’s total share capital and
reserves.
d) Loans shall be granted to Executive Officers, employees of the society who are members
only if:
i. The loan is in accordance with these By-laws and is not on terms more favorable than those
extended to other borrowers.
ii. The loan is approved by the credit committee and thereafter by the committee.
iii. The applicant takes no part in the consideration of his application at either the credit or
committee meeting

69. SECURITY FOR LOANS

The credit committee shall require the member to give the following securities for loans

a) The deposits of a member

b) The deposits of guarantors
c) Any other collarated as it may consider necessary provided that:
i. The committee shall not accept as guarantor, a member who has taken a loan and
has already guaranteed three loans.
ii. No member of the management and supervisory committee member shall act as
endorser or guarantor for borrowers from the society.
iii. A borrower may apply to the Committee for change of guarantors

70. REPAYMENT OF LOANS

a) Loans shall be repaid according to the terms in the loan application form. However,
a borrower may, on any day on which the society is open for business, repay his loan
in whole or in prior to its maturity, subject to approval of the committee
b) Any request for an extension of time in which to pay, shall be accepted by the
committee only in exceptional circumstances; provided such extension shall not
result in financial losses to the society. Any extension so granted shall be treated as
a new loan and an extension agreement shall be executed and signed.

71. RE-FINANCING OF LOANS

a) Notice shall be given to all members when the society has the capacity to re-
finance loans
b) The re-financing loans shall be allowed by the committee only when the society
has satisfied all loan demands and has sufficient funds.
 c) The re-financed loan shall be treated as a new-loan and subjected to the normal
loan approval procedures.

72. LOANS AS AN ITEM OF THE AGENDA

a) At every committee meeting the item “loans” shall appear on the agenda
and the credit committee shall present a list of loans recommended for
approval.
b) In the meeting, the treasurer will present an up-to date list of delinquent
borrowers showing:
i. Name of borrower
ii. Account number
iii. Date of loan
iv. Unpaid loan balance
v. Borrowers deposit balance
vi. Number of months the loan has been defaulted
vii. Security and guarantor’s

c) The committee shall take action to collect the overdue loans as follows;

i. Any loan overdue for payment for more than three months shall be referred to the
guarantor/guarantors provided that the society shall give notice of such intention to the
borrower and its guarantor’s
ii. Any disputed loan shall be referred to the tribunal provided that the society shall give a
written notice to the borrower on its intention to do so.
iii. Submit names of defaulters to credit reference bureau (C.R.B) upon issuance of notice of
intention to do so.

d) The committee shall make a full report on loans to the General Meeting.

73. CASH RESERVE

Except as otherwise authorized by the General Meeting and approved by the commissioner, a cash
reserve shall be maintained of not less than 10% of total capital for the specific purpose meeting
requests for deposits, withdrawals and other emergency pay-outs. The cash reserve may consist of
cash in hand, the balance in the current and savings account, and fixed deposits.

74. COMMON SEAL

a) The society shall adopt and use a common seal. The seal shall have an imprint bearing the
words “seal of MARKET TRADERS SAVINGS & CREDIT COOPERATIVE SOCIETY LIMITED” which
shall be different from the ordinary name-stamp of the society.
b) The seal shall be kept securely under key and lock by the manager and be used only in the
presence of the officers authorized to sign documents on behalf of the society.

75. FINES

For any breech of these By-laws or lawful instructions issued by the Committee and General
meeting, or his obligations on time, the member shall be fined an amount not exceeding Kshs.
20,000/=

76. DISPUTES

For any dispute concerning the business of society arises:

 a. Among members, past members and persons claiming through members, past members and
deceased members; or
b. Between members, past members or deceased members and the society, its committee or
any officer of the society or;
c. Between the society and any other cooperative society; or Alternative Dispute Resolution
mechanism (ADR) shall be referred to the Tribunal Appeals shall be taken to the High Court

77. MISCELLANOUS

No management or supervisory committee member shall receive from the society any payment
apart from sitting allowance and travelling and subsistence allowance except on honorium from the
net surplus as allowed in this by-laws.

The management and supervisory committee members and employees of the society shall hold in
the strictness confidence all transactions of the society with its members.