Teachers’ Fund Implements Changes in Loan Requirements

Teachers’ Fund has announced significant changes to its loan requirements aimed at enhancing the lending process and ensuring the sustainability of the fund.

The Fund stated that the requirements for the loan will be effective February 2024.

Adding, they said the changes will have a direct impact on teachers and their access to financial support.

Changes in loan requirements

To qualify for a loan, both new and existing contributors will now be required to contribute to the fund for a minimum of six (6) months. However, members who have been reinstated after exiting will need to observe a longer minimum contribution period of twelve (12) months. This adjustment aims to ensure that borrowers have a solid financial commitment to the fund before accessing loans.

Teachers’ Fund LBG has also introduced changes to the contribution to loan ratio. New and existing members will be required to have a total fund contribution equivalent to at least 15% of their loan request. However, reinstated members will need to contribute 20% of their loan amount. These adjustments align the loan amounts with the level of contribution made by borrowers, ensuring a fair and balanced lending system.

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Loan beneficiaries will be obligated to maintain a monthly fund contribution equivalent to 1% of their loan request. However, there will be maximum ceilings set for different types of loans. For personal loans, the maximum ceiling will be GHC200, while investment capital loans and habitat loans will have ceilings of GHC250 and GHC300, respectively.

In cases where investment capital or habitat loans fall within the personal loan threshold, the personal loan ceiling will apply. Similarly, for habitat loan requests above the personal loan threshold but within the investment capital loan threshold, the ceiling for the investment capital loan will apply. These restrictions aim to manage the borrowers’ financial obligations while ensuring responsible borrowing practices.

Teachers’ Fund has implemented a mandatory six (6) month interval between loan applications. This measure is intended to encourage financial prudence and provide borrowers with adequate time to repay their existing loans before incurring additional debt.

For loan requests up to GH¢10,000, borrowers will be required to have one witness. However, for loan requests exceeding GH¢10,000, members will need to provide at least one guarantor.

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To qualify as a guarantor, individuals must be registered and active members of the fund, with a minimum contribution period of six (6) months. Guarantors are limited to guaranteeing a maximum of two qualified loan applicants at a time.

To ensure the authenticity of the guarantor, a color copy of their Ghana Card (Front and Back) will be required for verification purposes. Moreover, the guarantor’s remaining active service period must be equal to or longer than the duration or tenor of the loan being requested by the loan applicant.

SOURCE: Coverghana.com.gh