CCT-GH Fund reviews operational policies and updates contributors

CCT-GH Fund reviews  operational policies and updates contributors

Management of the Coalition of Concerned Teachers-Ghana (CCT-GH) Fund has reviewed the operational policies of the Fund and updated contributors on the new structures.

This review publication was released on January 10, 2024. According to the Fund, they proposed some changes in the operational policies that will allow the Fund to better serve contributors and the future contributors/borrowers.

“We want to make sure that the Fund is always as useful, efficient, and safe as possible for our contributors/borrowers.”

Below is the areas the change affected.

a. Minimum Monthly Contribution

b. Maximum Loan Amount

c. Loan Interest Rate

d. Loan Policy

e. Full and Partial Withdrawals

Minimum Monthly Contribution

The minimum monthly contribution will increase from GHS 40.00 to GHS 80.00.

The increase in the minimum contribution represents an opportunity to both increase contributor’s savings and to expand our services to existing contributors. Accordingly, upon implementation the minimum loan amount will be GHS 8,000 subject to affordability.

The new contributions and their corresponding Loan Limits for 2024 are given in Table 1.

Maximum Loan Amount

The maximum loan amount limit will increase from GHS 20,000.00 to GHS 30,000.00, subject to affordability and other terms and conditions as stated in the amended loan policy below.

Loan Interest Rate

Due to high operational costs, particularly recent CAGD charges, it has become necessary to marginally increase the interest rate charged on loans from 10.2% p.a to 11% p.a, (i.e about 0.92%% per month). Even with this increase, CCT Fund loans will still be the cheapest among our competitors. The new loan chart upon implementation of the 11% interest rate is given in Table 2.

Amended Loan Policy and Procedure

The guidelines and procedures governing the application, processing and grant of CCT Fund loans has been amended as follows:

1. To qualify to apply and obtain a loan from the CCT Fund, the applicant must have been a contributor of the CCT Fund for at least six months.

2. In the case of an existing contributor increasing his or her monthly contribution, the waiting period after increment in contributions for accessing the corresponding loan amount would be four months.

3. Loan applications shall be considered in the order in which they are received.

4. Table 1 below shows how much a borrower can ordinarily apply for based on his or her monthly contributions to the Fund. Refer to Table 2 for the corresponding monthly repayments under different maturity scenarios (check the added PDF for full the details)

Table 1: Monthly Contributions and Corresponding Loan Limits

Below is the Monthly contribution arrangement and its corresponding Loan Amount in Ghana Cedis

GH¢80 – GH¢8,000.00

GH¢90 – GH¢9,000.00

GH¢100 – GH¢10,000.00

GH¢110 – GH¢11,000.00

GH¢120 – GH¢15,000.00

GH¢150-200 – GH¢20,000.00

GH¢250 – GH¢25,000.00

GH¢300 – GH¢30,000.00

5. Loans to applicants with less than 18 months continuous contribution history prior to the loan application will be restricted to GHs 20,000, regardless of the monthly contributions. Where there are break ups in contribution history, a total of at least 24 monthly contributions will be required to access loans above GHs 20,000. Minor break ups (up to three months) in contributions will be considered on a case-by-case basis.

6. A borrower with an existing loan may apply for “top up” loans within the permitted loan limits, after paying 60% (of the principal plus interest) of the existing loan. As a responsible lender, the CCT Fund does not encourage repeated loan “top ups”. There shall be ONLY one top up” application per loan. Further “top ups will not be permitted, and a new loan can only be approved after the existing loan has been fully paid off.

7. Where a borrower for any reason(s) is unable to repay his or her guaranteed loans to the Fund, the borrower and his or her guarantor shall be notified within twenty eight (28) days of the default by the Fund Management.

8. Where the borrower fails to immediately regularize his or her repayments, the Fund Management shall consider offsetting the loan balance from the savings of the borrower and the guarantor(s).

Policy on Full and Partial Withdrawal

Although the CCT Fund is set up to cultivate the habit of saving for the future, among other wel fare benefits, the Fund may allow contributors to withdraw all or part of their holdings. This policy applies to all contributors who want to withdraw all or part of their contributions from the Fund.

Eligibility

1. A contributor on loan does not qualify for any form of withdrawal of his or her holdings until the existing loan has been fully paid off.

Full Withdrawal

2. A contributor who seeks for voluntary exit before statutory retirement age will have his or her gains subjected to a 50% surcharge plus 2.5% of the accrued balance or GH¢100.00 (whichever is higher) as processing fee.

3. A contributor who did a partial withdrawal and thereafter exit within one (1) year will be charged 5% or GH¢200.00 (whichever is higher) as processing fee.

4. Processing of full withdrawal can only begin after:

a. the contributor’s monthly contribution deduction has ceased b. all previously deducted contributions by CAGD has been received by the Fund.

5. Full withdrawal processing may take up to three months upon receipt of application.

6. The contributor’s account with the fund will then be closed.

Partial Withdrawal

7. Partial withdrawals shall be done on a case-by-case basis. A contributor who partially withdraws can only qualify for a new loan of up to GHS 20,000 after 12 months following the withdrawal.

8. A contributor who partially withdraws can only qualify for a new loan above GHS 20,000 after 18 months following the withdrawal.

Exemptions

9. The following persons shall be exempted from the Withdrawal Charges:

a. A contributor who has less than or equal to six (6) months until their statutory retirement age or retires on medical grounds.

b. A contributor who retires voluntarily at age 55 from employment.

c. A deceased contributor confirmed with death certificates or an acceptable proof of death.

d. Exemptions as approved by the Board on humanitarian grounds. Once again, thank you so much for your cooperation and support throughout the year. Together, we will work to fulfill the aspirations and needs of all our
stakeholders.

Below is the PDF of Table 2 for the corresponding monthly repayments under different maturity scenarios

SOURCE: Coverghana.com.gh