M11 Safeguards suggested for making loans

Micro EnterpriseDebtFinancial Management
  • Group meetings, discussion and support can be of great benefit when planning new ways of raising money. A majority of members should approve the idea. Listening to good advice at the beginning is likely to result in successful repayment and increased self confidence.
  • Money in itself is unlikely to make a difference unless well used. Careful planning is needed which considers likely costs, markets and profit.
  • With money in the hand it can be very tempting to spend some on clothes or food. Family members may demand some of the money for other purposes. It may be helpful for other group members to help with purchasing the planned items as soon as a loan is taken out, to ensure the money is used as planned.

Discussion 
  • Discuss some suggested ideas for raising money, such as rabbit keeping, baking, bicycle repairs, drying fish or making straw mats. What should people consider for each idea suggested? This should include:
    • costs of raw material, tools or animals
    • rent of space
    • time to produce and sell items
    • local competition
    • likely profit.
  • Discuss any concerns around how to help members spend their loan wisely and safely.