1.1 A distress loan may be given to assist a University employee who is urgently in need of funds to meet unforeseen financial commitment.
1.2 The officer authorising a distress loan will decide at his discretion as to whether the request for a loan satisfies the terms and conditions laid down in these rules and whether the request is genuine.
1.3 The university employee who obtains a distress loan shall not use it for a purpose other than that for which it is given.
1.4 An employee of the university who has completed at least twelve (12) months of satisfactory service will be eligible to request a distress loan.
1.5 No distress loans will be authorised unless funds are available to cover the anticipated payment.
1.6 If an employee has submitted documentary evidence acceptable to the authorising officer to prove that the request is genuine and that he needs funds to meet an emergency situation, a distress loan may be granted to assist the employee to meet the following:
• Hospital charges or medical expense of the employee’s spouse or dependent children; cost of air tickets to visit parent (s) lying in a critical condition; funeral expenses of the employee’s spouse or dependent children; and school fees of employees immediate dependent children.
NOTE: Notwithstanding the above, the Vice Chancellor, in exceptional circumstances may authorise a distress loan for any other purpose other than those listed in the above rules.
1.7 Requests for distress loans for the following purposes will NOT be entertained under any of the following circumstances:
• Settlement of outstanding bills for rent, water, electricity, etc., payment of court fines; payment of bride prices; to purchase materials or equipment for houses; and to establish or run trade stores or other business activity.
1.8 The distress loan granted should not exceed the normal fortnightly net pay of the employee.
1.9 To defray administrative costs, a nominal charge of five (5) per cent of the full amount of the distress loan will levied.
1.10 The full amount of loan together with administrative charges will be recovered in six (6) equal fortnightly instalments, commencing from the pay period immediately following the date of payment of the loan.
The University Council at its Meeting No. 135 (3/97) held on 20 November 1997 considered and approved the recommendations from the University Finance committee to the effect that:
Details of the scheme are as follows:
2.1 Interest Rate/Service Charge of 5% per annum will be levied on all loans to cater for the administrative work involved and the risk factor.
2.2 The period of repayment is a maximum of 30 months. However, a staff may elect to repay the loan earlier.
2.3 Repayments can be made from a combination of fortnightly deductions and gratuity payments, or from any external sources of income.
2.4 The actual fortnightly deductions would depend on the amount of the loan (refer to Point 2.5) and the maximum period of repayment.
2.5 The maximum amount of loan is determined according to three categories of staff members and that loans are granted in proportion to the ability of staff to repay, as follows:
|Category of Staff||Maximum amount of Loan|
|a) Staff at grade level 14 to 20||K10,000|
|b) Staff at grade level 9 to 13||K8,000|
|c) Staff at grade 1 to 8||K4,000|
2.6 The actual amount of loan would depend on the items of furniture or white goods which need to be purchased. It is advisable that a staff should not purchase all their furniture and white goods at the same time.
2.7 Security of loan may be on any of the following terms or by a combination of terms and may include:
2.8 Emergency kits (furniture and white goods) be loaned to new staff (overseas staff on first recruitment and national staff returning from overseas study) for a period of two months. This would enable these staff to settle down and to make arrangements for the purchase of their furniture and white goods.
2.9 Where there are existing university furniture and white goods in a house, these would be valued and sold to sitting tenants. In these circumstances, the value of the furniture would be converted to a loan on the same repayment terms stated in Point 2.2.
2.10 A staff would not be given a new furniture loan unless all previous furniture loans have been repaid.
2.11 Furniture loans would not compromise access of staff to distress loans. However, approving officers would take into consideration the total liability of staff in relation to their levels of income, to ensure that the disposable income represents a living wage.
2.12 Request for furniture loan should be made on the Distress Loan application form and to be accompanied by quotes from the supplier.
2.13 The cheque for the loan amount will be made to the company supplying the furniture and white goods.