Co-Operative Societies Act 2008

115. Loan by society

1.      A society may give loans, guarantees, advances and other forms of financial assistance to its members.

2.      Except for a loan to another society, no loan may be made to a person who is not a member of that society.

3.      No loan may be made to a member of the Board or to an officer of a society of a sum in excess of the value of his shares, deposits and accumulated dividend and interest thereon unless adequate security is provided for the amount of the loan in excess of the value of his shares, deposits and accumulated dividends and interest thereon.

4.      No officer of a society shall be present at or participate in a meeting when his application for a loan is being considered.

5.      A loan made in contravention of subsection (4) is void and shall be repaid to the society immediately.