First Clients Approved - Week 3: 6th - 10th July 2009

The number of information sessions decreased significantly this week, down to 57. Only 9 new clients were registered. After peer review by the credit officers, 5 applications were passed on to a credit committee for approval. The committee currently consists of the National Director, Program Manager, Administrative Assistance and Accountant. The composition will change as the organization develops and there are more layers of staff.

Only 3 of the applications were approved. One was sent back to the credit officer because it did not have sufficient collateral and guarantees. The client’s proposed loan amount was close to our upper level of affordability, but was still within the limits. We returned the application to the credit officer to have the client find a guarantor to guarantee the difference between her chattel and the exposed loan amount and then resubmit because it was otherwise acceptable.

The rejected application was for repairing cracks in a wall, putting in a ceiling and building a kitchen. This application was the subject of much discussion. First, the cracks were a symptom of a larger problem. We would have like to have a report on how the builder assessed and proposed to fix the root cause of the cracks rather than just fill them. Secondly, we didn’t see any evidence of a viable project in terms of a kitchen or ceiling project. We looked at pre-loan photos and there were no blocks saved, no foundation or walls built and no other evidence of a home improvement in progress. It gave every indication of someone who heard about a loan and came to apply even though he was not actually engaging in an active home improvement plan. This seemed like a high risk for loan diversion and was rejected outright.

Now having approved clients, we wished we had some kind of form or invoice to inform the clients that they had been approved, should come and sign loan agreements and make specific payments into our bank account for the loan insurance and security deposit. This was an oversight when we were developing forms. An offer letter was developed. It once again explains the terms of the loan and gives instructions to the client for depositing the security deposit and insurance payment. As we get ready for our first disbursements next week, we met with the bank manager where our checks to clients will be cashed to ensure that we are on the same page about the procedure so that the clients do not have any problems. Clients will present their ID cards when they cash their checks and the client numbers will be written on the checks.

"Our Neighbourhood:" The view from the Mbagala Branch Office's front porch. To the far left is a restaurant, followed by a donought seller, fruit stand, a video parlor (cinema), general shop and phone dealer.