P E R M A N E N T S H A R E S
Fact Sheet – Credit Union
Q. What is a Permanent Share?
A. A Permanent Share represents a member’s ownership of, or member’s equity in the Credit Union.
Q. What do I do with these Permanent shares?
A. Permanent Shares cannot be used as collateral. Permanent Shares cannot be withdrawn and can only be transferred when the member decides to give up membership or dies. Permanent Shares are necessary in order to retain membership in the Credit Union.
Q. How will I as a member benefit from having Permanent Shares?
A. Permanent Shares represent the members’ part ownership or equity in the Credit Union. Permanent Shares are used for the growth and development of your Credit Union. You will receive dividends on your permanent shares
Q. How will the Credit Union benefit?
A. Permanent Shares increases the Capital of the Credit Union and allow it to undertake expansion and enhancement of services to the members. Increasing the permanent shares will help the Credit Union meet the requirements of the Cooperative Societies Act 2 of 2011
Q. What is the cost of a Permanent Share?
A. Each person is required to purchase at least one Permanent Share in order to become a member. The cost is only $50.00 per share.
Q. Will dividends be paid on Permanent Shares?
A. Subject to the profitability of the Credit Union dividends may be paid on permanent shares if recommended by the Regulating body which is the Financial Services Unit
Q. Can Permanent Shares ever be withdrawn?
A. No, they can be sold to another member when the member discontinues his/her membership or it may be transferred to his/her beneficiaries when he/she dies but members must have permanent shares for as long as they are members.
Q. Is the Implementation of Permanent Shares necessary?
A. Permanent Shares are necessary as they give the Credit Union another option for raising capital. It is also in keeping with the International Financial Reporting (Accounting) Standards that require equity to be treated in a certain way.
Also, the Co-operative Societies Act 2 of 2011 requires that the institutional capital of the Credit Union be at least 10% of Total Assets
IRRESPECTIVE OF HOW MANY SHARES YOU ALREADY HAVE,
WHEN APPLYING FOR A LOAN YOU
LOANS $500-$1,000 1 SHARE
LOANS $1,001-$5,000 2 SHARES
LOANS $5,001-$9,999 3 SHARES
LOANS $10,000-$14,999 4 SHARES
LOANS $15,000-$49,999 5 SHARES
LOANS $50,000-$150,000 6 SHARES
LOANS OVER $150,000 7 SHARES
PLEASE BE GUIDED ACCORDINGLY