Group Lending Model:
In the field of traditional microfinance, ACFL will work on lines of the Grameen model which ensures that financing reaches each individual member of the group based on merit. ACFL will work on a robust risk control over the loan disbursement process, which is critical for its efficacy. The Grameen model will be suitably modified to a more practical and workable JLG model, considering the local condition.
Group Formation :
Up to 5 women, who live in the same area and have known each other for the past 3-5 years come together to form a group. The group is self-made with support from the ACFL Executive and includes members who are comfortable but unrelated with each other. A clear Leader for the group is also identified.
Compulsory Group Training:
Once the group is formed, the group is given training on:
- Products and Services of ACFL
- Policies and Procedures to be followed
- Group guarantee concept
- Benefits of the model
- How to acknowledge
Group Recognition Test:
Once the training is completed, ACFL conducts a formal test to ensure that all the members of the group are aware of and understand the loan concepts as enumerated above. For a group to be eligible to receive a loan from ACFL, this test has to be compulsorily passed.
Each group is typically comprised and has a mandatory fortnightly meeting. During these meetings, the following takes place:
- Discussion of Social/Community issues
- Communication of ACFL Developments/Changes
- Filling of loan applications
- Collection of repayments