In this guide 6 sections
A cooperative society’s loan record should connect the member, their shares, the sanction by the committee, each surety and every recovery. Keep arrears visible by member and by surety. Rules differ by state and by society bye-laws, so configure software to your own bye-laws and confirm them with the registrar or your auditor.
The member comes first
A cooperative loan is lent to a member, so the member register is the base record. It holds admission date, share holding, nominee and contact details.
Eligibility often depends on how long someone has been a member or how much share capital they hold. Those are bye-law matters, so write them down as rules the system checks, not as memory in a clerk’s head.
Keep savings and share accounts in their own ledger where you already have one. The loan record can read from them without owning them.
Sanction by committee
Most societies sanction loans through a committee that meets on a schedule. Each application should reach that meeting with its papers complete and a note from the secretary or manager.
Record the resolution number, the date, the amount sanctioned and any condition. If a member’s application is deferred, the reason belongs on the file.
A search by resolution date should bring up every loan sanctioned at that meeting. Auditors ask for this.
Sureties and security
Where the society takes sureties, each surety is a member with a liability of their own. The record should show who stands behind which loan and how many loans one surety has backed.
If the borrower falls behind, the surety’s exposure appears on the same arrears report. Contact them early, with the borrower’s knowledge.
Other security, such as a deposit lien or a document held, should sit on the loan too. Mark its release date when the loan closes.
- Surety’s member number and signature date
- Total loans backed by each surety
- Lien on deposits or shares, if any
- Documents held and the date released
Recoveries and arrears
Recoveries arrive by cash at the counter, by bank transfer or by deduction from a salary where the employer agrees. Record the mode on every receipt.
Show arrears by member, with the age of the oldest unpaid instalment. A monthly list for the committee is useful, but a weekly list for the manager is what changes outcomes.
How overdue loans are classified and what notices follow depends on your law and your bye-laws. Ask your auditor which statements the society must produce.
What software should and should not do
Software should keep the member, loan, surety and receipt connected, stamp each change with a name and date, and print what the committee needs.
It should not decide who gets a loan, and it does not make a society compliant by itself. Treat statutory returns as a separate task unless the vendor shows you a feature that produces them for your state.
GullySystem’s loan management system covers the loan book. Member deposits and share capital stay in the books you already keep unless you choose a fuller product.
Member loan file cover sheet
A one-page cover for each loan. It carries the member number and share holding. Next come the amount applied and sanctioned, the committee resolution number and date, and the sureties. The foot holds security held, a schedule summary and a recovery log.
Open a blank worksheet to printQuestions owners ask
Do all societies need sureties?
No. It depends on the society’s bye-laws and the loan type. Record whatever your bye-laws require so the file is complete at audit.
Can the same software hold deposits and share capital?
Some products do, some do not. Ask what is included. The GullySystem loan product holds the loan book, and fuller banking products exist for deposit-taking societies.
How often should arrears be reviewed?
The manager should look weekly and the committee monthly, at least. More often if recoveries are mostly by cash and slip quickly.
Will software produce statutory returns?
Do not assume so. Ask the vendor to show the exact return for your state, and check the format with your auditor.