Micro Lending

Programs

Private Sector Development

The future plan for WEIF's micro-lending initiative includes the establishment of a micro lending institution. A lending circle unit of five (5) women will be set up with base capital of approximately $2,000 per unit. This micro lending institution will be established after exhaustive research and needs assessment. It will be based on similar liens as those used by other successful organizations such as the Grameen Bank of Bangladesh and the First Micro Lending Institution of the Aga Khan Foundation. WEIF expects to be operational in the field of micro lending win the next two (2) years with the financial support of CIDA.

Essentially the model works with the set up of lending circles comprising of prospective borrowers. A qualified lending circle supervisor will recruit and train local field workers as field workers in their villages. These field workers will help identify prospective clients for each lending circle. The local field workers will explain to the prospective borrowers the guiding principles of the lending circle. Initially, only 2 borrowers are eligible and given loans. The circle is monitored for 6 months to ensure that borrowers are adhering to the rules and regulations. Only if the initial 2 borrowers have repaid their loans without default in the first 6 months, can a third member access the loan fund. Similarly, the fourth member of the circle will only be able to access the loan fund if all three existing borrowers are current in their loan repayments within the next 6 months. Finally, the fifth member will be able to access the loan fund if all the four existing borrowers are current in their loan repayments. The maximum term for the lending circle loans will be 24 months. These restrictions serve as peer pressure and are moral suasion for borrowers to repay their loans.