FREQUENTLY ASKED QUESTIONS FOR MEC LOANS – (FAQs)
1. Q: What conditions does one have to fulfill so as to get MEC loan from PRIDE Tanzania?
- Should own a legal business
- Should be residing near a PRIDE Tanzania branch – within operational area of the branch.
- Should be at least 18 years of age.
- Should be ready to abide to PRIDE Tanzania regulations, which include: to form a group with other clients with the main purpose of guarantee each other for their loans, to attend to the mandatory weekly meetings and to repay for the loans without delay.
2. Q: What are the qualities of people that can form the basic guarantee group of five (EG)?
- People who very much know and trust each other.
- Should not be close relatives.
- Should own small businesses qualifying for loans from PRIDE Tanzania
3. Q: How long does it take from the time when a group is registered with PRIDE Tanzania to the receipt of loans?
A: The first three clients in the group will receive their loans on the sixth week after registration, two weeks later loans will be disbursed to the other two.
4. Q: Is it possible for one to guarantee himself by his own physical assets (collaterals) instead of being guaranteed by fellow clients in the group?
A: MEC loans are group guarantee loans, particularly targeting small business entrepreneurs most of whom are considered not to own such physical assets. Therefore, physical assets (collaterals) are not a prerequisite for acquisition of loans under this arrangement.
5. Q: Can PRIDE Tanzania receive a registered group as its client and disburse loan to it?
A: No, with the MEC loan product, loans are disbursed to individuals in groups guaranteed by group members.
6. Q: Does PRIDE Tanzania accept clients with loans from other financial institutions? A: Yes, it accepts such clients as long as they fulfill all their obligations with PRIDE Tanzania. It shall be the responsibility of fellow clients in the groups (guarantors) to assess the credit worthy of such a client before guaranteeing and approving for disbursements of his/her loans as they are the ones who at the end of the day shall be held responsible for repayment of the loans in the event that the client is burdened with many loans and thus fails to repay.
7. Q: Can one be readmitted back as a PRIDE Tanzania client after he/she had voluntarily exited?
A: Yes, PRIDE Tanzania provides room for admission of a voluntarily exited client as long as he is accepted back and guaranteed by fellow clients in the respective EG and MEC. This voluntary acceptance should be mutual between the readmitted clients and the other clients in the groups.Upon his/her wish, and upon consent from fellow clients (guarantors) such a client may decide to start with the loan level subsequent to the last one he/she has serviced as long as he/she had completely cleared the preceding loan before he/she voluntarily exited.
8. Q: What is the consideration for a client who fully repays his/her loan before due?
A: Such a client shall be allowed to apply for and receive the subsequent loan amount at least a week later.
9. Q: How can PRIDE Tanzania be of assistance in the event that a client dies, is incapacitated or his/her business is faces serious disaster while servicing PRIDE Tanzania loan?
A: All PRIDE Tanzania clients will have to be insured by an insurance firm that is in contract of such insurance scheme with PRIDE Tanzania. In the event of such unfortunate incidence, the insurance firm shall bear the loss. Thus, both the affected client (or his/her family) and PRIDE Tanzania shall receive compensation for the loss in accordance with the insurance contract.
10. Q: Does the Loan Insurance Fund (LIF) attract any interest payment?
A: PRIDE Tanzania pays to its clients twice per annum benefit termed as Bonus accrued from the LIF contributions.
11. Q: Is it allowed for a client to contribute weekly LIF amount that is more than the compulsory weekly contribution amount for the fund?
A: Definitely a client is allowed to contribute any amount to the fund as long as the amount is not below the minimum weekly LIF amount and is at least of equal installments to the loan repayment installments paid.
However, it should be remembered that the this fund is not a Savings Account which allows a client to deposit and withdraw any amount of money at any time as long as he/she has enough balance. Besides serving as savings, the LIF is essentially an insurance fund (as the name goes). Thus PRIDE Tanzania has a special policy that governs withdrawal from the fund. A client may also withdraw his/her LIF amount (net of loan balance) upon his/her exit.