Video updates from Togo part three: “A small loan is like oil in an engine; it allows people to move forward"

Finally, part three of Tracey's video updates from her April 2013 trip to Togo is here! Here are also parts one and two for some context.

To round off my blog/video updates from Togo, I wanted to share with you some lasting impressions from the trip.

The passion and commitment of the WAGES staff

Many of the office staff began their careers as Loan Officers, including the General Manager, Ramanou Nassirou who, when talking about the entrepreneurs said “most of them know how to run their business, we just provide them with a small loan to get them started - a small and affordable loan is like oil in a car engine; it allows people to move forward". 

I have already written about how WAGES supported clients who lost everything in the massive fireswhich swept through the great markets of Lomé and Kara last year and this demonstrates further the commitment that WAGES have to improving the lives of their clients. 

The importance of a good loan officer

 A good loan officer will take time out of their incredibly busy work schedules to support entrepreneurs beyond simply disbursing loans and collecting repayments. This makes a huge impact on the lives and successes of the people they serve and their businesses  and I saw it time and time again with the WAGES' staff.

Yaya’s story: Yaya was one of the very first entrepreneurs to receive funding from Lendwithcare back in 2010.  Yaya told me there has been a big difference between before the loans and now.  He is able to send his children to school, they eat three meals a day and his business has ensured the health of his family. Recently one of his children was sick but he was able to afford to pay the hospital fees – something he’s sure he wouldn’t have been able to do before.

What access to finance really means

Access to financial services such as loans and savings accounts are absolutely vital to people who would otherwise never be able to move their business beyond the most basic hand to mouth existence. 

Assiahame’s story: I met Assiahame at her small hairdressing salon in a side street of Atakpamé.  She told me that her salon alone didn’t have enough regular customers, so her loan enabled her to diversify into selling jewellery, bags as well as hair pieces. Before finding out about WAGES she had previously used a money-lender who charged her 50% interest on her loan and used to hassle her for the repayments.

And that like any small business, there are many challenges and although access to credit helps lessen the burden, it is not always enough ...

The need to diversify when things get tough

William’s story: I had met William a year ago and was struck by how important he is to his village, near the town of Atakpamé.  Not only is William a fisherman employing twelve people in the village, he is also the local Pastor.  This year when I met William he was starting to diversify his income sources as it is becoming harder and harder to make a living from fishing.  He told me that fishing was only good for three months of the year and it was becoming increasingly difficult to make that income last.  As is typical of men like William, rather than just accepting the situation he was thinking of other ways in which he could earn a living.  He had just started a very small business, selling musical instruments and has now taken a loan so he can grow this business.

I hope you have enjoyed this small window into the lives of some of the entrepreneurs featured on lendwithcare.org.  I really enjoyed meeting them and hearing their stories.

Finally, I would like to thank everyone who made my time in Togo so enjoyable and rewarding, especially Felix Kilinglo and the Loan Officers from the Atakpamé branch; Forgive, Lolonyo, Sylvain, Success, Dodji, Emmanuel and Esso and Mensah Dakevi, the WAGES lendwithcare officer and Sambieni Yarikoi who accompanied me for all my time in Togo and were the perfect example of the warmth and hospitality of Togolese people.

Tracey Horner, Head of Lendwithcare

  

Role of Credit Score While Acquiring Disability Loans!

The department of social security provides some monthly income to the disable people so that they can live their life without facing any ado. Physical as well as mental disability makes people helpless and doesn’t allow them to work and earn that is why DSS provides them small income. But sometimes these incomes are not enough to meet some urgent needs. At that point of time disability loans provides them the most needed helping hand to meet their requirements with ease. 

There are many specialized lenders available in the offline and online market that consider disable people as a potential borrower because they get the stable source of income via disability benefits. The amount and term of these finances are determined on the basis of benefits obtain by the applicant from DSS but its approval is strictly depends on their credit score. It means loan seekers need to have good credit rating to qualify for these financial services.

Credit rating of the individual plays a vital role in acquiring these finances because lenders offer these loans with jobless status and without taking any collateral. The interest charges also depend on the credit worthiness of the borrower as lender offer low rate to high rating holder and high rate deals to low credit scorers. That is why, it is important that one must improve his/her credit rating before applying these cash assistance.

Steps That Helps In Improving Credit Rating:

• Get The Copy Of Your Credit Report And Rectify Errors:-

The first step towards improving your credit rating is to get the copy of your credit report and check its accuracy. You must request your credit report from all the three major credit bureaus to analyze and mark the errors, if any. Rectifying the errors and updating your information helps in boosting your credit score easily without facing any difficulty.
 

• Pay Your Utility Bills And Credit Card Payments On Time:-

Paying your bills on time helps you in improving your credit rating. Every timely payment puts a positive effect on your credit rating and gives a good payment history. Do keep in mind that missing or delaying single payment can decrease your score which is not good for your report.

• Settle Your Existing Debts, If Any

Unpaid debts can damage your credit rating very badly so if you have any then try to settle them as soon as possible. Paying back the existing debts helps you a lot in improving your credit rating and achieving the necessary score to get the new loan easily at low rates.

Visit the website at www.disabilityloans.net/disability-loans.html and get further details about these online cash help for disabled.

"Liberation loans" offered by our partner in Pakistan to free poor people from spiralling debt

After the 2014 Oscars ceremony, Steve McQueen's film “12 Years A Slave” deservedly took home the big prize of best picture. However, it is important to remind ourselves that the barbaric practice of slavery is not something we can consign to the history books. It is still a contemporary issue in many countries around the world.

The epic 1957 Bollywood film ‘Mother India’ movingly portrays the story of a family struggling to survive against the machinations of a local moneylender. Many decades later this is still one of the rare examples of Indian cinema vividly reflecting the reality faced by millions on the Indian sub-continent, and instances of local moneylenders charging usurious rates of interest remain as prevalent as ever throughout much of South Asia.

As well as providing loans to people wanting to establish or develop their microenterprises, lendwithcare’s partner in Pakistan, Akhuwat, provides ‘liberation loans’ to people who are struggling to repay debt that has been taken from local moneylenders. In most instances, borrowers took out small loans at interest rates of up to 20% per month and the debt has spiralled out of control. Sometimes borrowers have already sold what few assets they own, yet still struggle to keep up with repayments. Shahzad Akram, Akhuwat’s Chief Credit Officer, recalls instances where young borrowers have even committed suicide and some moneylenders demanded that borrowers sell their daughters to repay the debt. In parts of southern Punjab and Sindh it is not uncommon to find borrowers and their children who have been forced to become indentured labourers for feudal landlords as they struggle to repay debts that were often taken out many years ago.

Akhuwat calls them liberation loans because they free the borrower from the seemingly never-ending cycle of increasing debt. Each request is carefully considered on an individual basis to ensure that the application is genuine. There is a maximum loan size of 100,000 rupees or about $1000, although most loans are smaller, typically around 35,000 rupees or $350. Akhuwat does not charge any interest and borrowers are asked to simply repay the loan in monthly instalments over a period of up to 18 months. Each year Akhuwat makes several thousand liberation loans to clear the debts of heavily indebted borrowers.

Rather than providing the borrower with the cash, Akhuwat instead directly repays the whole amount owing to the moneylender in the presence of the borrower and often other witnesses as well. It then asks the moneylender to sign a contract stating that loan has been settled in full and that he/she will not demand anything further from the borrower. The organisation also educates borrowers on the dangers associated with taking out short-term high interest loans to ensure that they do not fall into the same debt traps again.

[The first example of a liberation loan to be uploaded on lendwithcare can be found here. Ilyas Maseeh found himself in spiralling debt after one of his relatives got him involved in a court case. He took out a loan from a private money lender who imposed harsh conditions on this loan. Akhuwat is now helping him clear his debt and resume a normal life.]

Akhuwat, which was established in 2001 by Dr Amjad Saqib, has grown quickly to become one of the largest specialist providers of microloans in Pakistan – it now has almost two hundred thousand active clients, including many non-Muslims, served by more than 250 branches located throughout the country. Akhuwat provides interest free, referred to as Qard Hasan, loans to the working poor. Qard Hasan loans are promoted in Islamic teachings as one of the mechanisms to assist poor people; indeed they are preferred to providing the poor with outright charity. With an average loan size the equivalent of just US$144, Akhuwat lends to some of the poorest people in Pakistan without any formal collateral and has a remarkable on-time repayment rate of 99.83%.

By Dr. Ajaz Ahmed Khan