How Sokosacco.com loans work.
Step 1: Loan Application
Member A applies for a loan of say, Sh10, 000 and chooses repayment period to be 5 months. This member has Sh. 1,000 in Savings.
Step 2: Loan Processing
Member A's account is debited with Sh. 750 i.e 75% of Member A's savings.
Step 3: Guarantors
Total outstanding loan amout to be covered is Sh. 9,250 i.e loan amout less member A's contribution 10000 - 750 = 9250
Loan Fee is 10% of loan amount i.e 10%x10000 = 1000
Soko processing fee is 10% = Sh. 500
Guarantors get the remaining 10% = Sh. 500
Step 4: Contributions
Guarantors B and C invest in the loan
B contributes 5000 and C contributes 4250 i.e 5000+4250= 9250
On repayment, B gets 5% of 2500 and C gets 5% of 2125 i.e. Sh. 500 and 425 respectively.
Step 5: Investment
Repeat process by investing on members D, E, F....
N. B. You should be careful to invest on only highly rated members.
