Products

Updated as on 3rd September 2016

Loan Products details of Group Lending Program:

  1. Organization is offering following 6 different types of loan products namely:
    • FGL - 26 (Fortnightly General Loan - 26 Fortnight Installments)
    • FGL - 51 (Fortnightly General Loan - 51 Fortnight Installments)
    • FGL - 52 (Fortnightly General Loan - 52 Fortnight Installments)
    • FGL - 53 (Fortnightly General Loan 53 Fortnight Installments)
    • Weekly General Loan 49 weeks installments (WGL)
    • Monthly General Loan 12 months installments (MGL)

    Note: With effect from 18th April 2016, the earlier loan products i.e, Long Duration - Fortnightly General Loan (LD - FGL), Long Duration Fortnightly Supplementary Loan (LD-FSL), Short Duration - Fortnightly General Loan (SD-FGL), Fortnightly General Loan -18 (FGL-18) disbursements have been discontinued.

  2. Loan Size
    • Minimum Rs.8,000/- maximum Rs.40,000/- Loan tenure ranges from 26 Fortnights, 51 Fortnights, 52 Fortnights & 53 Fortnights.
    • Rs.6,000/- Fixed Loan tenure for 49 Weeks for weekly installment loans and 12 Months for monthly instalment loans.

  3. Interest Rate will be 25% per annum (Rounded to nearest rupee) on diminishing balance method with weekly/fortnightly/monthly rest based on the loan product selected by member.

    Rationale for Interest Rate Model: Having taken into account, factors such as average effective cost of borrowing, other operations cost (including staff cost, administration expenses, etc), cost of loan loss provision / write off, profit margin, and considering interest rate cap / margin cap that is permissible as per RBI rules for microfinance companies, it has been decided to charge interest rate of 25% per annum on declining balance on all microloans given by the Company. Further the Company may give interest rebate as may be appropriate from time to time keeping in mind the permissible margin cap as per RBI guidelines, and reasonable maximization of value for the Company's borrowers in their struggles to pull themselves out of poverty in a financially sustainable manner. All microloan borrowers of the Company are considered as being in the same single category of borrowers from a risk premium perspective, and accordingly are charged the same rate of interest.


  4. Loan Processing Fee is 1% on the disbursed loan amount plus applicable service tax (Rounded to next rupee)

  5. Prepayment Charges and One Time Membership fee is Nil.

  6. All borrowers will be issued a Loan Pass Book Card at free of cost.

  7. Effective Rate of Interest charged to our Microloan Borrowers for the Quarter ended 30th June 2016 was 24.11%