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GROUP LENDING ENHANCEMENT WORKSHOP

GROUP LENDING ENHANCEMENT WORKSHOP. Group Stages and Membership in Group Lending. Group Lending: Stages in Center/Group and Membership Life Cycle. Formation Stage Maintenance Stage Transition or Graduation Stage. Center Lifecycle. MEMBERSHIP. TIME.

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GROUP LENDING ENHANCEMENT WORKSHOP

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  1. GROUP LENDING ENHANCEMENT WORKSHOP Group Stages and Membership in Group Lending

  2. Group Lending: Stages in Center/Group and Membership Life Cycle • Formation Stage • Maintenance Stage • Transition or Graduation Stage

  3. Center Lifecycle MEMBERSHIP TIME

  4. Formation Stage: CharacteristicsZero to 2 years • Increase in Group/center membership • Rapid expansion in membership recruitment • Members still adhere to credit & group guarantee “tapal” obligations • Some delinquencies may be experienced • Novelty of group lending experience to a new AO may inspire AO to do good and well

  5. Maintenance StageLess than 2 to 4 years • Members experience “tapal” fatigue • Attendance in meetings decline • Group/center experience member drop outs • Delinquencies may worsen • Bank staff may resort to collection techniques that treat clients poorly • Good payers and those with growing businesses may leave • AO fatigue or burnout

  6. What processes happen in a center during Maintenance Stage?

  7. Transition or Graduation Stage2 years & above • Borrower has had at least 4 loan cycles • Center may have 2 categories of clients: • Clients wanting to and qualified for individual liability credit. Individual credit responsibility is key to keeping these clients. • Clients that should stay under group loan liability: not qualified for the maximum loan amount available under group loan; or have poor repayment record

  8. Framework: Stages of Group & Membership in Group Lending \ \

  9. Framework: Stages of Group & Membership in Group Lending

  10. Framework: Stages of Group & Membership in Group Lending It is important to recognize the symptoms

  11. Framework: Stages of Group & Membership in Group Lending It is important to transition clients in time before they leave you

  12. Criteria to Consider in doing the product enhancement or transitioning • Aging Centers/membership • Repayment Performance • Readiness of the Clients • Clients’ demands

  13. Thank You!

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