The 9 Steps to a Microcredit Loan

The Rose Microcredit program has one of the highest repayment rates in Sri Lanka with a loan recovery of 95%. Our 9-step system supports a borrower through every stage of the process.

The Rose Microcredit Team visits a new village to speak about microcredit. They explain the process, opportunity, benefits, risks and obligations and answer many questions. They hold separate meetings for women to encourage them to join and ensure that no one is left out.

Villagers who are interested come forward and fill out an application to become a member.

Approved, the new member opens a savings account with the Rose Microcredit Bank.

The new member must make regular deposits to their savings account for 3 months. These deposits can be as little as 1 rupee. This identifies people who are able to save. Members are encouraged to add to this account throughout their loan period. They may withdraw their savings at any time.

The Loan Officers then help the member develop his/her idea into a viable business plan. They review his/her financial situation and establish a realistic level of debt and repayment schedule. If the member has no experience or no business idea, they may study a few sample businesses that are run by the program. These simple demonstrations are helpful teaching tools.

The loan application is accepted and the member waits for the money to be made available. Despite the success of our program and high member repayment rates, there is currently a backlog of 3 to 6 months and approximately 600 approved members awaiting loans. Your donations can directly impact this backlog and ensure that more approved members receive their loans sooner.

When the loan is granted, a loan officer visits the new business every 1-2 weeks to collect payments and provide business counseling. The visits continue until the loan is repaid in full.

Upon complete repayment of a loan, a member is eligible to take consecutively larger loans until such point that their business has grown sufficiently in credit and scale to be eligible for loans from a standard bank. At this point, the member has in effect ‘graduated’ from the Rose microcredit program, proving themselves to be stable, reliable and self-sufficient members of their community.

Borrowers are invited to donate into a ‘Community Share’ crisis fund. The fund is a form of insurance, which will cover the loan repayments in the event of a crisis. This provides an extra layer of stability to the loan program and gives each loan member the peace of mind that their loans can be repaid no matter the circumstance.