We employ a group-lending model that was introduced by the Grameen Bank in the 1980s. Potential clients form their own groups of four or five women and come to the WomensTrust office for an initial screening. In order to track impact, our staff records information about their businesses, their incomes, their families, their education, and their homes.
Once the group is accepted, each woman receives a beginning loan ranging from $75 to $200. Each group member must repay her individual loan before the whole group is eligible for its next loan. We charge 15% interest for each four-month loan period. That rate is well within Ghanaian banking guidelines and is set purposely high to compensate microfinance institutions for the risk they are willing to assume making uncollateralized loans to the poor and very poor.
Each of our loan clients is issued an individual ledger book with the date and details of her loan and weekly repayments. Once a group has successfully repaid their loan in full, they are eligible for the next level loan and can progress up the scale to a maximum amount of $350. Beyond that, women may be eligible to receive higher level loans in our Entrpreneurs Club up to $5000.
Our repayment rates typically average 93%, or higher, and we use the interest to cover the administrative and operational costs of the program. The interest is also put back into the loan program for new and continuing loans. Our staff works one on one with clients to ensure they are able to make timely repayments.
In our experience accountability encourages self-esteem. We assume the responsibility of maintaining a thriving loan organization, and the women are accountable for repaying their loans. Our staff in Ghana holds regular focus groups to check in with our clients to monitor their progress and respond to their concerns.