MuCoBa provides four types of credit facilities:

It has to be noted that a client will not be allowed to apply for a loan unless he/she has a savings account with MuCoBa and the same has existed for at least three months prior to application.

1. MuCoBa Individual Business Loans

These are loans provided to support viable economic activities in Mufindi district. Therefore, the main criteria to qualify for these loans is the existence of business and the borrower should have at least one year experience with that business.

Another important criteria is the collateral for the loan. Collateral accepted include but not limited to houses, plots of land with some development, motor vehicles, machinery and cash deposits with MuCoBa. Values of Collateral are assessed against the amount of the loan requested.

The duration of the loan lasts for 18 months. The grace period for most of individual business loans is one month. However, in other businesses the grace period is fixed depending on the nature of business, for example in agricultural activities it depends on the nature of crops involved.

2. MuCoBa Group Loans

These are loans given to individual members in a group in order to support their small economic activities. These loans are designed to clients who need relatively small loans due to the nature of their businesses and who in one way or another cannot get reliable collateral under conditions of individual loans.

Another reason for the use of this methodology is for the bank to provide this service more efficiently due to the size of transactions. Normally clients select themselves in subgroups between 5 and 7 members and form a group ranging between 20 and 40 members. MuCoBa issues a loan to a group in order to facilitate administration. For the clients often living in remote places up to 100 km from Mafinga, it means that they avoid high transportation cost. For MuCoBa, administration- and transportationcost are reduces thanks to the group-lending. Individual members are issued loans in accordance with their respective savings at a ratio of 1:3 (save one borrow three). In addition to savings, the loan is guaranteed by peer presure in solidarity groups, mutually guaranteeing each others loans. A group has to receive training with regular savings before it qualifies to get a loan.

The duration of the loan lasts for 12 months and grace period is fixed depending on the nature of businesses although in most cases it is one month.

3. MuCoBa SACCOS Loans

These are credits issued to Savings and Credits Cooperative Societies (SACCOS) in order to provide credit facilities to their respective members. The aim is to provide additional financial capacity to these SACCOS in order to meet the demand of their members. MuCoBa expands outreach in an efficient way because it uses SACCOS as a wholesaler. SACCOS loans are repaid within one year but under exceptional circumstances it can be extended to 18 months.

4. MuCoBa Employees Loans

These loans are issued to employees of both public and private sectors in order to meet their economic or social obligations. The loans are repaid on monthly basis from deductions of respective employees’ salaries. There are two types of Employees’ loans. The first is fully guaranteed loans in which the Employers bear full responsibilities for the loans of their employees and the second is where the responsibility of repaying loan falls on individual borrower and the employer acts as a referee. In the latter case, the employee is required to have his/her own collateral to secure a loan. Employees Loans are normally repaid within one year.