Credit Policy

Background

ZYLLOO CASH is a digital lending solution that provides flexible and soft loans to employees and small-scale businesses or vendors under the agreed terms and conditions. The solution is a property of ZYLLOO CONSULT LTD and it is intending to supporting employees and small-scale businesses by disbursing salary advance loans and small vendor loans through an Android mobile App and a mobile USSD code. Thus, Through Zylloo Cash solution, ZYLLOO CONSULT LTD operates two products namely;

• Payroll Salary Advance (P-SA); and
• Small Vendors Credit Advance (SV-CV).

This document intends to provide a clear credit policy under which ZYLLOO CONSULT LTD operates its digital lending facility.

Products’ description and conditions

 P-SA description

Beneficiaries

P-SA is given only to employees under a clear working contract or working agreement with a registered company. It is subjected to the company’s HR validation.

Maximum duration

P-SA is given for a maximum duration of one month or 30 days. An employee can borrow for a duration from one to 30 days maximum.

Maximum amount

An employee can borrow up to 20% of his/her net salary. the maximum amount that can be borrowed is set at Kenya Shilling One Hundred Thousand (KSH 100,000). Only an employee who earns KSH 500,000 or more can be entitled to the maximum amount of KSH 100,000 (For example, a given employee earning a net salary of 70k is only entitled to borrow up to a maximum of 14,000 as 20% of his net salary).

Rate

A daily rate of 0.65% is applied. For instance, for a duration of a full month either 30 days, the borrower will be charged 0.65% times 30, i.e. 19.5%.

 Principal

The principal on which the interest rate will be applied comprises the amount requested plus the processing fee. The client will receive the full amount that he/she will have requested. He/she will pay back the same amount plus processing fee and interest. The processing fee is set at 2% of the amount disbursed.

Qualification

To qualify for the P-SA an employee is required to be referred by his/her company HR so that he/she can register his/her membership through the Zylloo Cash mobile app on his/her smart phone or using USSD as an alternative to an Android smart phone.

Once an employee register through the Android Mobile App, the HR or the company management officer in charge will need to approve, through the HR interface, by setting the loan limit in regard to the employee’s 20% net salary.

Once the approval is granted within the company, Zylloo Cash will finally authorize the employee to borrow according to his/her limit.

Employees who do not have an Android smart phone will be requested to register manually by filling a form provided by Zylloo Cash for that purpose. The form’s content must be approved by the Company and submitted to Zylloo Cash for authorization.

Disbursement

Once the employee’s membership is validated and approved, the employee can access the fund under his/her qualification conditions upon request. The funds will be disbursed through his/her mobile money system.

Loan roll over

An employee can roll over his/her loan as long as he/she pays back the interest and processing fee.

Delay/late repayment

After a grace period of 48 hours, any delay in repayment will lead to a penalty of 1% per day based on the total repayment amount (principal plus interest).

SV-CA

Beneficiaries

This facility is made to support small-scale businesses. Any person undertaking a clean small business is entitled to the SV-CA.

The duration, rate, minimum and maximum related amounts present as follow;

Duration		rate	Minimum to maximum amount disbursed	Processing fee based on the amount disbursed	Principal based on minimum amount	Total Principal plus interest based on the minim amount	Principal based on maximum amount	Total principal plus interest based on maximum amount
Weeky and Monthly loans	Days
Weekly	1-7	5%	1k-30k	2%	1,020	1,071	30,600	32,130
2 Weeks	8-14	10%	5k-30k	2%	5,100	5,610	30,600	33,660
Monthly	15-30	15%	10k-30k	2%	10,200	11,730	30,600	35,190
2 Months	31-60	20%	15k-30k	2%	15,300	18,360	30,600	36,720

Qualification

To qualify for the SV-CA, a vendor is required to be referred by a designated Zylloo Cash field officer so that he/she can register his/her membership through the Zylloo Cash Mobile App downloaded on his/her Android smart phone or using USSD alternative. The Mobile App or the USSD will inform on all detailed information to be provided to get the client registration validated and approved.

As per the loan structure above, a client who wish to borrow more than KES 20,000 is required to provide a loan security and guarantor.

Disbursement

Once the vendor’s registration is validated and approved, the beneficiary can access the funds under his/her qualification conditions upon request and through his/her mobile money system.

Loan roll over

A vendor can roll over his/her loan as long as he/she pays back the interest and processing fee.

Delay/late repayment

After a grace period of 48 hours, any delay in repayment will lead to a penalty of 1% per day based on the total repayment amount (principal plus interest).

Description of the Zylloo Cash digital lending solution

The solution

 The solution provided by ZYLLOO CONSULT to manage automatically its micro-credit business is called “Zylloo Cash”. The system is composed of the following;

• Portal – dashboard
• Mobile App for field officers
• Mobile App for company’s HR
• Mobile App for customer/employees
• Mobile App for customers/SMEs

Loan transactions management

Dashboard management  

The overall loan operations are managed through the Zylloo Cash dashboard. The dashboard interacts in real time with all the mobile App interfaces and the USSD. It manages customer registration activities, loan inquiries and other customer inquiries, approvals, business reporting, user management and payment transactions.

Field officers’ management

Field officers are ZYLLOO CONSULT sales team that interacts with customers (SMEs) to sell the SV-CA product. They are tasked to collect customers personal and business information and assist them to register. Field officers also make follow up on the repayment. They also assist customers in ensuring their business performance.

Thanks to their assessment of the customer businesses, field officers suggest loan limit for each customer assessed. The loan limits suggested will then be approved or rejected by Zylloo Cash management through the Dashboard.

Field officers use a specific interface of the Zylloo Cash Mobile App that allows collecting data on the SME customers.

HR management

HR are from companies which are in agreement with ZYLLOO CONSULT for providing their employees with Zylloo Cash digital lending solution. Basically, for an employee to benefit from Zylloo Cash loan system, he/she needs to be referred by his company through the HR or the Company’s Management. Each company that enters in agreement with ZYLLOO CONSULT will be given a referral code to be able to invite its employees to register as Zylloo Cash customers.

HR use a specific interface of the Zylloo Cash Mobile App that allows them approve registration from their employees. Based on the employee net salary, HR will set the loan limit which is supposed to be an equivalent of 20% of the employee net salary.

Zylloo Cash management through the dashboard will authorize the customer/employee to access the loan only after approval from his/her Company’s HR.

Risk management

 Risk identification

The overall risk considered here is related to client failure in loan repayment. Zylloo Cash Dashboard through reporting system will allow identify insolvent clients and isolate them from others in order to apply them risk mitigation measures.

Follow up and permanent assessment of the customers/SMEs business activities by ZYLLOO CONSULT field officers, will also allow identify and prevent repayment failure. It is as well expected from companies HR to provide information to prevent repayment failure from customers/employees.

Risk mitigation

 In order to mitigate the risk, the following measures are implemented;

Early risk identification

ZYLLOO CONSULT field officers have mandate to follow up and keep permanent assessment of the customers/SMEs business to ensure they perform well so that they can be permanently in a position to pay back their loans and grow their businesses.

Customers for which the business trend alerts on possible insolvency, will be put in manual disbursement. This measure means the loan disbursement will no longer be automatic upon request by the customer. Zylloo Cash management will have to manually approve a request from a customer assessed to be in alert. Loan security and further assessment of the client business will be required before approval of the loan request from a client assessed to be in alert.

companies in agreement with ZYLLOO CONSULT are requested to provide updates on the debt situation of their employees vis-à-vis lending institutions (micro-credit, banks, internal borrowing from the employer, etc.) in order to allow an analysis of the employee’s debt pressure and establish his solvency capacity. A customer/employee assessed to be under high debt pressure will be put in manual disbursement as well. Before disbursing loan to an employee assessed to have limited solvency capacity, apart from the company’s guarantee, it may be requested a loan security in terms of asset.

 Loan restrictions

No loan will be disbursed out of the above described system (Zylloo Cash digital lending system).

With regard to the SV-CA, no loan can be disbursed without passing through a registered and authorized field officer. no loan can be disbursed with insufficient customer’s data. Field officers are required to ensure exhaustive data collection and suggest loan limit accordingly.

With regard to P-SA, no loan can be disbursed without membership registration approved by the company’s HR or Top Management. The loan amount cannot be superior to the employee’s net salary confirmed by the Company’s HR or Top management. No loan can be disbursed with an amount beyond 20% of the net salary confirmed by the Company’s HR.

Cumulative loans are not allowed if the client still holds a loan balance. In other words, before requesting for a new loan a client must totally clear the previous loan.

Loan rolling over will be subjected to an approval. This means that a customer who choose to roll over his loan will not get an automatic disbursement. The latter will be subjected to Zylloo Cash management approval. Additional information may be required to understand the reason why the customer rolls over his/her loan.

Loan security and Guarantors

Field officer constitute information guarantors of their customers borrowing up to KES 10,000. Beyond this amount, customers are required to provide a second guarantor or provide an asset as loan security.

The company’s HR, in agreement with ZYLLOO CONSULT, accept to be the guarantor of the customers/employees.

Six months mobile money statement Analysis

Before to qualify as a borrower, SME/small vendor clients must submit their Mpesa or Airtel money statements for the last six months. No request or client registration will be approved without analyzing the client last six months mobile money statement.

Insolvency and delay in repayment

Penalties

Late loan repayment incurs daily penalty of 1% of the total amount to be paid (principal plus interest). Customers have a grace period of 48 hours after the loan due date before incurring penalties.

Membership cancellation

ZYLLOO CONSULT reserves the right to cancel a customer’s membership following one of the reasons below;

• Recurring delay in repayment
• Insolvency noted and approved
• Business bankruptcy
• Job loss

Forced collection and possible legal proceedings

If the customer insolvency is confirmed, in case his/her loan had required a loan security such as an asset kept as guarantee, ZYLLOO CONSULT will proceed by auction the asset to recover the total amount of the loan including possible penalties. If the asset kept as guarantee is worth more than the total amount due to ZYLLOO CONSULT, the insolvent customer will be remitted back the balance. In other way around, the insolvent customer will have to top up the balance in favor of ZYLLOO CONSULT.

In case of no guarantee kept by ZYLLOO CONSULT, all established and legal means will be used to recover all unpaid amounts.

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