Come Sunday, I’m up and rushing out the door to catch the early morning bayaan at the government Urdu school at Rajendranagar. As usual I’m late and have to bear a couple of angry stares from my fellow volunteers. I shuffle into my seat and focus on the short sermon being delivered by the local Maulana. The sermons’ themes revolve around the various issues faced by the community, motivating them to keep their morale high and attend the next religious event on the calendar.
Following the bayaan, comes my personal favourite bit of the session: repeating the twelve affirmations. Like much of our microfinance system, this has been taken from the Grameen model. One of the borrowers steps forward from the crowd and reads out these 12 affirmations.
A complete list of affirmations is available here.
Then the activities begin. We’re divide ourselves into 3 groups. One is the collection group, the other the interview group and the last is the disbursal group.
Collection:
Here is where the bulk of the activity takes place. Borrowers pay off their loans over a 20 week period. Their loan cards are updated with the latest payments as well as our records. If there are any closures of loans, part of the savings that they have been depositing with us are returned.
Interviewing:
As per a pre-deteremined schedule, there are a certain number of interviews lined up every week. Each potential borrower presents her business plan on what she plans to do with the loan offered to her and how she plans to return the funds loaned to her. Some typical businesses in my branch are selling clothes purchased in wholesale, stitching, and making or scenting agarbattis (incense sticks).
The interviewer asks various questions to assess the repayment capacity of the borrower:
1 What are you doing for your business?
2. Since when are you doing it?
3. What is your investment?
4. What are the items you buy? And at what rate and quantity?
5. What is the frequency of buying?
Once the interviewer is confident that the borrower is capable of performing the business she is describing, her loan is approved and set for disbursal in the subsequent week.
Disbursal:
The disbursal group reviews the loan application forms approved the previous week and if all five of the group are present, issues the cheque for the borrower. The borrower then purchases whatever assets she needs to start her business. She begins to pay back her loan the subsequent week.
After an hour or two the session ends and the day’s records are closed. The cash is collected and records are reviewed.
We very often have students, other NGO workers and business men come observe this process in person. Feel free anytime to get in touch with us to visit a typical Lifeline microcredit session.