TSC secretariat staff set to get car, house loans in new policy

Mr Cheptumo Ayabei, TSC Director of Finance.

The Teachers Service Commission (TSC) secretariat staff are set to benefit from car, house loans in a new policy being developed by the organisation.

This will be a welcome relief for the more than 4,000 secretariat staff working at the Commission’s headquarters and the field. These privileges have not been available for staff despite other civil servants in the public service being able to access them.

These regulations will streamline the administration of the car loan and mortgage scheme through the establishment of a fund.

The commission said that they have sent the draft to every staff email in order to take all concerns into account.

The regulation draft is in line with the Public Finance Act, No.18 of 2012 under the TSC Staff Car Loan and Mortgage Scheme Fund regulations of 2023.

In the regulation, the object and purpose of the fund shall be to provide a loan scheme for the purchase, development, renovation or repair of residential property and purchase of car for the scheme members.

It further states that the initial capital of the fund shall consist of the monies standing to the credit of the account on the date of the coming into operations of these regulations and the Parliament may appropriate additional monies to fund.

“The Car Loan and Mortgage scheme fund shall be administered as a special account in the TSC fund and operated by the officer administering the fund,” regulations draft reads in part.

The commission has established a Loan Management Committee, which will process applications for the loan in accordance with the existing terms and conditions of borrowing.

The members of the loan scheme are advised to make loan application through the officer administering the loan as prescribed by the Fund Management Committee and such fund to be used to purchase a residential house, a car, land for construction of residential house and renovation, repair of a residential property for the occupation of the applicant and his/her immediate family.

The Commission added that the loan for development of a residential property may be granted at the discretion of the committee to a member of the scheme who is in the possession of a title deed to the land on which the development is intended to be carried out and no borrower is allowed to have more than two loans at a time from the fund.

“The scheme members applying for the development of a residential property loan, shall be granted the money in phases with first disbursement based on 75 per cent of the value of the land on which the residential property is proposed to be developed while the subsequent disbursement based on the rate of completion of the various phases of development as certified by a qualified valuer,” reads the draft.

The Commission added that  all application under these regulations shall be accompanied by copies of designs of proposed residential property duly approved by county government within whose area is to be situated and any other relevant Government agency, bill of quantities in respect of the proposed development, renovation or repair, an official search of the title to the property intended to be purchased certified by the Commissioner of Oaths or a magistrate, certified copy of the sale agreement relating to the property and, certified copy of logbook and valuation report in case of a car. The applicant shall pay for the cost of stamp duty and other levies.


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The TSC added that the maximum loan entitlement for a member of the scheme shall be subjected to 67 per cent commitment level and subject to statutory deductions on monthly pay. A member shall confirm in appointment as a permanent and pensionable or on a fixed term contract with the commission in order to qualify for the loan.

The Commission also has stated that the loan granted to a borrower under these regulations to be funded at the rate of 100 per cent of the value of the property or the sale price whichever is lower, 90 per cent for the construction of the house for a residential purpose, 100 per cent of the value of the car or the sale price whichever is lower. The scheme may also advance the loan inclusive of processing fee, legal fees and insurance cost, excluding statutory levies which are subject to the borrower’s ability.

The loan shall be payable within a period of 20 year or remaining period of service of the borrower. Whichever is less for purchase of construction of residential property; 10 years of purchase of land a lone, 72 months for purchasing a new vehicle and 60 months for the purchase of used vehicle.

The Commission has also stated that the loans shall attract interest chargeable at 2 per cent per annum on a monthly reducing balance and may be amended from time to time at the discretion of the commission. This will be different on a financial institution or bank which may attract interest charge of not more than 2 per cent per annum to cover management cost.

The draft regulations on the loan has given the Commission the Authority to have a charge registration on the property or car whose member is unable to comply with the loan regulations, it shall therefore provide transfer deed duly signed by the borrower and letter authorising the commission to sell the property or car in case of default.

“During the loan repayment period, borrowers shall ensure the residential property is used for residential purposes only, maintain the property in satisfactory state of repair and not alter or make any structural alterations to the property or title,” the draft adds.

The borrowers are required by the commission to take out and maintain a mortgage policy and fire policy for the residential property with insurance firm approved by the TSC and a comprehensive insurance for a car, the cost to be paid out of the fund and debited in such borrower’s account.

These regulations shall be supplemented by such terms as may, from time to time, be detailed in application form supplied by the Commission and in the contract between the financial institution and the commission

The staffs are encouraged to send their feedback in soft copy to sddfinance@tsc.go.ke not later than April 2, 2024.

By Brian Ndigo

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