Documentation

Creating guarantors

Add a guarantor to a loan account to provide additional security for loan repayment. You can add existing clients, external persons, or group savings accounts as guarantors.

Prerequisites

Steps

Open the loan account for which you want to create the guarantor
Open the Guarantors tab
Click Create Guarantor
Select the guarantor type:
- Existing Client - Use another client as a guarantor
- External Guarantor - Add a person who is not a client
- Group Savings Account - Use funds from a group savings account

Adding an existing client as guarantor

Select "Existing Client"
Type part of the client's name in the "Name" field (case sensitive)
Select the correct client from the search results
In the "Relationship" field, select the relationship between the guarantor and the borrower
Optionally, select a savings account to link as collateral:
- Choose an account from the "Account" dropdown
- Enter the guarantee amount (must not exceed available balance)
Click "Submit"

The client details appear at the bottom of the form showing name, ID, and office.

Self-guarantee (borrower guarantees their own loan)

The borrower can guarantee their own loan by pledging one of their own savings accounts as collateral.

Select "Existing Client"
Search for and select the borrower's own name
The "Relationship" field is not shown for self-guarantees
Select a savings account from the "Account" dropdown (required)
Enter the guarantee amount (must not exceed available balance)
Click "Submit"

A savings account must be selected. Without a linked savings account, a self-guarantee is not permitted.

Adding an external guarantor

Select "External Guarantor"
In the "Relationship" field, select the relationship to the borrower
Enter the guarantor's personal information:
- First Name (required)
- Last Name (required)
- Date of Birth (optional)
- Address Line 1 (optional)
- Address Line 2 (optional)
- City (optional)
- Zip (optional)
- Mobile (optional)
- Residence Phone (optional)
Click "Submit"

Adding a group savings account as guarantor

This option is available when the borrower is a member of one or more groups.

Select "Group Savings Account"
In the "Group Name" field, select the group (only groups the borrower is a member of are shown)
In the "Savings Account" field, select a group savings account (required)
Enter the "Guarantee Amount" (required):
- Must be greater than 0
- Cannot exceed the available balance shown below the field
Click "Submit"

The group savings account is linked as collateral for the loan. When the loan is disbursed, the system automatically creates a lien (guarantee hold) on the savings account for the guarantee amount. This hold:

Reduces the available balance in the savings account
Prevents withdrawal of the held amount
Is released automatically as loan payments are made
Can be viewed in the Liens tab of the savings account

For more information, see Liens.