Rejected Loan Applications - Week 5: 20th - 24th July 2009

Minor adjustments continued to be made to various forms, such as the introduction of the client number into the loan agreement. Credit officers began using feedback forms with their clients. No official complaints have been lodged by clients yet, but these will certainly come eventually. A suggestion box was put on the veranda of the office as per one means for feedback that was communicated to clients in their welcome packets.

Mbagala Branch Office with the new suggestion box next to the door on the right.

Several loans were rejected by the credit committee. One was because of lack of a visible project. The client wanted to extend his house and build a wall, but the proposed project started with the purchase of blocks and there was no visible work done at all. He might have used the loan as intended, but we believed that it was at high risk of diversion and recommended that he advance his project first. We are sticking by a decision not to have the purchase of blocks as part of the loan for completions, extensions and auxiliary structures. These are commonly collected as in-kind savings and it is reasonable to expect the clients to advance their project to wall plate level prior to the introduction of a home improvement loan.

Another loan was rejected due to over-indebtedness. The client could afford the MAKAZI BORA loan according to our calculations, but he had an outstanding loan with a bank. The two loans together would have required monthly payments exceeding 60% of his gross income. This was too risky for Habitat and also too much strain on the household and was rejected. We advised him to apply again after paying off his bank loan if he still desires the MAKAZI BORA loan.

The only handheld GPS unit had been used by interns mapping construction support services in the operational area. With their work finished, the GPS unit was used to record the position of clients' houses for the first time. These will be entered into a Google Earth satelite photo of the area to allow us to identify the location of our clients and study any patterns in loan distribution.

The portfolio for Mbagala Ward is not resultng in many clients, despite its high density. It is a fairly well-established settlement with minimal construction activity. We decided to add Azimio Ward to the Mbagala Credit Officer's portfolio starting the following week.

Magdelena was the first credit officer to use the GPS unit to record the position of a house in Chamazi during a loan assessment.