Explaining the microfinance programme
The R4W community is strong and growing with over 300 local women now members. The microfinance programme offered by R4W is known among them.
Here is how the microfinance programme works:
To apply the applicant must first send a letter of application for funds, introducing themselves, stating the reason for the application, the amount requested and the details of three guarantors.
Guarantors can be friends or family members and they are asked firstly by the applicant to offer a guarantee of loan repayment in the event that the applicant defaults on the loan.
Following this, the 5 women of the R4W Executive Committee (selected by the women) including the Chairwoman, review the application and debate whether the loan should be given.
When approved the lady is then asked to come pick the formal application. The application is then discussed with the Loans Officer at R4W who provides further detail about the scheme and the process and who then asks them to complete the formal application form. The Loans Officer also vets the guarantors and ensures that they are clear on the commitment they have made
R4W founders Eve and Denis then ensure that all final checks are done; that the applicant and guarantors have been visited and that all are deemed trustworthy and that the business idea is valid and worthy of the investment.
The formal application is then signed off by all parties and the loan given
Loans are given over a 10 month period with a 3% and 4% interest rate charged, based on a reducing balance repayment method for members and non-members (i.e. interest is paid on the monthly balance only). The loan must be paid in full by the end of the load period
If a recipient of a loan has difficulty paying on time, her situation is closely reviewed and permission for extension granted where agreed.
The scheme is recognized and approved by the government under certificate registration number 157484
This compares favourably to typical bank loans carrying 3% fixed interest rates (or higher) and often requiring share purchase, collateral and additional processing fees
No collateral required to guarantee the loan. Instead and in the spirit of R4W’s empowerment of women, fellow women act as guarantors for their peers, further encouraging community engagement and cohesion.