Frequently Asked Questions


What can I do to help my Credit Union become stronger? 


Each member must be committed to investing more than the minimum requirement of one share in their credit union. This is one of the ways that the equity/capital will increase. Increased equity/capital will help the society to be safer and sounder. Members can invest regularly in their credit union by buying a few shares every year.



Do I have more voting power at the AGM if I own more than one share?


No. Each member will continue to have one vote even if he/she holds more than one share. This is in keeping with the credit union operating principle of democratic control...”One member, one vote”.


What is member share capital? 


These are shares/equity members will own in their Credit Union. It is the money members will invest in their credit union and leave there so that they can continue to be part owners of their Credit Union. These monies will form the capital (money) of the credit union.


Why introduce member share capital? 


In the past all members’ regular savings were classified as shares. The international accounting standard (IAS) says this can no longer be done since they can be withdrawn. Savings which can be withdrawn by members at anytime must be kept separate from shares. Savings must be classified as liabilities….monies the credit union owes to members. Shares are members’ equity and represent what the member has invested n the society. Shares can be transferred and sold but not withdrawn. This will protect your Credit Union’s capital base.


Will I receive dividends on my shares?


Yes. This is a return on your investment. Payment of dividends will depend on the surplus that the society makes for the year. It is expected that the rate will be attractive enough to encourage members to buy more than one share.


Who is a co-maker and what are their rights? 


A co-maker is a member who signs an instrument in collaboration with another member to indicate a promise to pay a financial obligation. A co-maker has the right to periodically check with the credit union on the status of the loan that he/she co-signed. The co-maker cannot be given the balance of the loan but can be informed as to whether payment is being made as stipulated in the loan agreement.


Can I leave my shares to someone else in my will? 


Yes. However where a beneficiary is named on your Credit Union Membership Card (in keeping with Section 100 (3) of the Co-operative Societies Act No 15 0f 1996) this nomination will supersede the provision in the Will that gives Shares to a beneficiary.


What do the Hands and Globe logo represent? 


The Hands and Globe logo has symbolic and historic significance for the Credit Union Movement. The cupped hands symbolize both the financial security and support offered by the international Credit Union network, as well as the fact that the success of the Movement is in the hands of its members. The globe symbolize the worldwide scope of the Movement and suggests the impact that a truly united Movement can have on the financial development of all countries. The people within the globe represent the real focus of the Credit Union Movement. It is the human element – the harmony of people working for people – that distinguishes Credit Unions from other financial institutions.


What is a Permanent Share? 


It represents a member's ownership of, or member's equity in the Credit Union. This amount cannot be withdrawn while the person remains a member.


Why is it necessary for the Credit Union to implement Permanent Shares?


This gives the Credit Union another option for raising capital. It is also in keeping with the International Financial Reporting (Accounting) Standards that require equity to be treated in a certain way. Permanent shares represent members' equity in the Creidt Union. 


Can I withdraw my Permanent Shares?


Equity Shares cannot be withdrawn but is transferable or sold to a Credit Union member.


Would my Permanent Shares be the same amount as that of all otehr Credit Union members? 


Not necessarily. It may vary from Credit Union based on the capital and/or regulartory requirements to be met by each Credit union.


What is the difference between equity shares and what we now call shares?


The money in regular shares can be withdrawn, subject to a notice period if necessary. Permanent shares cannot be withdrawn; they can only be sold or transferred when the member decides to give up membership.


How does the Credit Union benefit?


A Permanent Shares increase the capital of the Credit Union and allows it to undertake expansion and enhancement of service to the members.


Will I get dividends on my Permanent Shares?


Dividends may be paid on Permanent Shares if recommended by the Board of Directors and approved by members in an annual genenral meeting once profits are made.


Can I use my Permanente Shares as collateral?


Permanent Shares are not intended to be used as collateral. Members have the option of using their deposits to provide collateral for their loans.



Who and what will determine how much Permanent Shares members will need to have? 


These decisions will be made by members at general meetings on the recommendation of the Board.