Micro Finance Loan
These are small loans given to organised groups to invest in income generating activities which can be financed with limited risks: horticulture, small businesses, and dairy after some cycles.
Terms and conditions
- The product targets Women / Men not salaried who are involved in vegetable and farming production and / or small business and income generating activities, who are members of existing groups, good citizens aged over 18 years in possession of national identification card.
- Group size shall be between 10 and 30 members.
- The group shall be the borrower and group guarantee shall be used, where group members guarantee one another.
- Loan duration shall be 3, 6 or 9 months for cycle 1 to 3 and 12 months for cycles 4 and above. Dual duration inside the same group shall be allowed for groups that are cycle 2 and above.
- Applicants shall deposit 15% of the loan amount granted upfront as collateral to guarantee the loan.
- Applicants shall deposit upfront 2% of the loan amount as mf shares contribution.
- Applicants shall deposit upfront 1% of the loan amount as insurance to cover outstanding loan balance incase of death happenings for the borrower.
- Minimum loan amount shall be 3, 000 shillings and Maximum 100,000 shillings depending on the level of the loan, but adjusted for inflation every year at the prevailing rate.
- Repeat loans for the group based on the group repayment record of the previous cycle, and the evaluation of the leadership and organization of the group and members.
- Advance and partial repayment are not accepted.
- Late repayment penalty total amount of the instalments in arrears cumulatively shall be applied to the group and not to the individual members and it shall cease 4 months after the first default.