Loan Eligibility

Loans are advanced to micro / small entrepreneurs’ and smallholder farmers who have registered with a self-help group and have complied with Delight Capital and group rules and regulations.

The Group

The group must meet the following conditions:

  • Be located in a specified location.
  • Have at least 7 members of a business group who are currently running small or microenterprise or farming activity.
  • Be registered with the relevant Government authorities.
  • Must be registered with Delight Capital.
  • Members businesses must have been in existence for at least six months.
  • The members must preferably be spread over a radius of 5km.

Individual

Each individual member in the group must:

  • Be 18 years of age or above.
  • Be a Kenyan citizen holding a national identify card.
  • Not close relatives or members of one family – siblings, married couple, parents, etc.
  • Own and operate businesses within the location.
  • Agree to abide by all the rules and regulations as laid down in the group constitution.
  • Agree to attend all group weekly/bi-monthly/monthly meetings depending with the group.
  • Abide by all Delight Capital policies and procedures.

All DCL loans under the group based lending will be appraised and recommended first by the group and then the Micro Finance Officer (MFO), with the support of the business manager. The group will provide information on the client’s character to establish their willingness to repay while the MFO will undertake the technical appraisal to confirm the client’s capacity to repay the loan. After the MFO and business manager loan evaluation, their approval recommendations shall be forwarded to the Branch Manager for the final approval and loan disbursement.

The following items shall be forwarded to the DCL business support centre (office):

  • Duly filled and signed loan application and agreement forms.
  • Client’s identification documents that is ID card copies, PIN certificates, etc.
  • Copies of guarantors ID.
  • Group meeting’s minutes approving the loan.
  • A summary of the compliance officer’s appraisal report and recommendation signed by both the MFO and Business manager.

Loan Disbursement: DCL group-based loans are disbursed through electronic fund transfer to the individual applicant bank account, M-PESA or through a cheque depending on the client’s preference or type of loan product.

Loan Repayment Mode: All DCL loans are repaid on a weekly or monthly basis. The repayments are made through their respective group accounts into DCL collection account.

Loan Supervision & Management: All DCL loan borrowers are followed up promptly and closely. The MFO is advised to confirm the loan use immediately after disbursement. Thereafter the BRO will make at least one monthly visit to assess enterprise performance, identify any problems and build firm client-lender relationship. This is critical to ensure effective performance of any of the DCL loan products.

Loan Delinquency, Recognition & Management: All DCL loans with one installment in arrears will be considered to be delinquent and categorized under late performing loan category. The MFOs with support from the group members will follow-up the loan repayment.

Loan Size and Duration

Purpose

DCL loans are advanced for working capital, acquisition of fixed assets or a combination of these. The loan purpose is subject to loan appraisal. Loans are provided to borrowers in different types of enterprises within the various subsectors namely; trade, service, processing and manufacturing or mixed.

Loan Collateral / Security

All DCL loans must be secured, irrespective of size. Delight Capital provides loans to entrepreneurs and small holder farmers who lack conventional form of securities to borrow from the commercial financial providers.

The following are therefore the alternatives/substitutes to collateral acceptable as security for DCL loans:

  • Group Guarantee: All loans must be guaranteed by all the group members by way of a joint undertaking to forfeit accumulated and future savings which serve as a loan guarantee.
  • Loan security fund: All members must contribute at least 20% of the total amount they intend to borrow as cash collateral.
  • Pledges: All loans must be supported by a list of pledges to the group. Loans above Kshs.50, 000 must be accompanied with a sworn affidavit for the securities pledged.
  • Chattels Mortgage: Loans above Kshs.50, 000 largely advanced for acquisition of capital goods are secured through a chattel mortgage on the assets.

Loan disbursement: DCL loans are disbursed by cheque or telegraphic transfers in favour of the borrower.

 Charges and Fees: All DCL loans attract charges and fees. DCL reserves the right to review and amend these charges from time to time.

 Grace Period: DCL loans have an allowance for grace period of a maximum 2-4 weeks subject to loan appraisal and the type of the product. The interest accrued during grace period is capitalized and repaid over the loan period.