Credit/Loan

Bases for loan investment

• Must have been a member for at least 3 months.
• when investing through a group loan, only groups of 5 members will be evaluated, and if a group has fewer then 5 members, investments will only be made after bringing the number up to 5.
• When investing in loans, one can consider the duration of membership and savings, as well as their business.
• If there is an increased demand for loans according to the project, it will be possible to give loans by taking personal acceptable land of the member as collateral.
• The member loan request from must include an analysis of the member’s business, group, and any loans taken in the past.
• According to the ” one household, one member” concept a loan will be invested by forming a group of 5 males, and the loan will be invested within the loan limit by accepting an acceptable collateral.
• Members who do not time period more then will be deprived of the services and benefits provided by the organization.

1 Simple and seasonal loans

Members affiliated with this organization re provided with general loans and seasonal loans (disciplinary loans) after exceeding 5 installments of the second year. However, for those members who have past three years, personal mortgage based loan for house and land, cattle and buffalo farms, agricultural business loans, and business loans will be made available. The subsidized loans provided by small farmer Development microfinance institution will be invested in specified areas where excellent transactions have been made.

Credit Limit

The organization will provide a loan based on the following amounts: for the first year, NPR 30000, for the second year, 50000, for the third year, 70000 for the fourth year 100000 after fifth year, the organization will provide a loan amounting to 10 percent more than one and a half times the individual’s savings and the savings of the group center.  in group savings, the maximum risk based on savings will be up to Rs. 100000 (one hundred thousand) it will take up. The seasonal discipline loan will be provide up to a maximum of Rs. 30000 will be provided up to. ” Regardless of what is above, savings from members can be considered as a basis to provide loans, taking into account the double as well as calculating the associated risks according to the group’s decision.”

Loan timing 

The loan period invested by this institution will be from 1 to 3 years. the loan repayment will be made in 25 installments bi-weekly, or in 12 monthly installments annually.

Interest Rate 

the interest on this loan will be 15 percent. depending on the operational efficiency of the organization, the board of directors may adjust the interest rate.

Loan Disbursement System

The loan will be provided based on the collective guarantee of the group or personal land collateral, where initially two members of the subgroup will receive it, followed by another two members, and finally the group leader. The loan will only provide an observation visit or training as an incentive after the first two installments of the first group are paid. the orientation training will only provided to recognized members who have completed training.

2. Working Capital and other loans 

In this fiscal year, new members will not be allowed to invest in working capital loans; it will be done only if absolutely necessary, according to the decision of the management committee.

Loan Duration 

This loan term will be for 1 year, and the monthly interest and the annual management fee will be taken for renewal. members who do not pay interest on time will not be given a loan.

Interest Rate 

The interest on the current capital loan will be 16 percent, and for collateral and group collateral combined, it will be 15.5 percent. the organization will be able to revise the interest rate based on the operational efficiency as per the decision of the board of directors.

Loan Distribution System

This loan will only be provided to good borrowers have been members of the organization and been conducting business for the past 3 year. the loan member orientation training will only be provided to recognized members.

” Regardless of what is written above, it is not allowed to allocate more than 5 percent of the loans to current capital loans.”