All members have an equal right to benefit from the credit service

Loan service

Loan/ Credit provision is the other primary undertaking in Awach SACCOS. All members have an equal right to benefit from the credit service. Apart from fulfilling the pre-credit requirements in the bylaw, Awach’s loan committee and loan department take various factors mentioned below before deciding on each credit application. Segregation of duty during the loan approval process clearly applies because once the loan committee approves a particular case; the request will be authorized by the board chairman and finance manager before effecting any payment.

Requirements to get a loan

  • For all types of loan products, the member should save regularly for at least six consecutive months that amounts 25% of the requested/needed loan amount.
  • Should bring a letter from her/his employer institution that specifies the monthly income of the member.
  • Business operators should bring a renewed trade license and cash flow statement that indicates their monthly cash flow for one year.
  • Should bring collateral or cosigner for the loan.
  • Should bring one member from the cooperative as a cosigner. Should be willing to pay 1% service charge and 1% insurance.

Loan Amount

  • A member could take up to 800,000 (eight hundred thousand) Ethiopian birr loans for social purposes, health, and education.
  • A member could take up to 1,000,000 (One Million) Ethiopian birr loan for business expansion. 
  • A member could take up to 3,000,000 (Three million ) Ethiopian birr loan to buy a car for business.
  • A member could take up to 2,500,000 (Two million five hundred thousand) Ethiopian birr loan to purchase an automobile.
  • A member could take up to 5,000,000 (Five million) Ethiopian birr to buy, construct or maintain a house.

Loan Interest

  • The loan interest rate is for women's 13% per year and for men13.5% per year for social, health, and education loans.
  • 14.5 % per year for automobile, Transport/Trade car loans and business loans
  • 15.5 % per year for a house loan.
  • The interest is paid on the remaining loan balance and the system of calculation is called Amortization.

Loan disbursed and collection

Currently, Awach has disbursed a loan that amounts to over 13.4 billion Ethiopian birr for more than 36,108 members. A thorough post-credit evaluation shows that more than 99% of credit users have utilized their loans to open their own shops, construct houses used for renting, and own business cars, and most members are able to participate in different business activities to increase their income. Awach’s credit service has benefited its female members in many ways. Numerous women members have exited destitution and started supporting their families, and quite a few women have expanded their businesses by multiplying their investments.

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