Savings Loans Association with the support of a Dutch organization has embarked on a unique strategy to ensure that all micro loans given for community and household empowerment are utilized and returned continue the development intervention. How does this approach work?
1) The community identifies a project that would generate income to support individual households and community in general
2) The community members select individuals to join the groups comprising of 5 members per grou
3) SLA provides a block fund (micro loan) to the group
4) Each member of the group receives an average of $100-$250 micro loans and all payments to SLA is made as a group-If one defaults, the group has to meet the requirements for defaulting.
The advantage of this process allows individual members in the group to comply and ensure that all payments are done and on time-otherwise if not, the group is asked to pay a fine.
All members of the group feel ownership of the group project and individual household are empowered to sustain their lives.
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