Basic Loan Changes
Our current Personal Loan program would see a couple of key changes to improve loan repayment and lessen the stress our current program may inflict, which may contribute to our default rate. First and foremost, we started with a study tying loan repayment to the loan amounts themselves. Together with Dr. H and Hugh, we came to the conclusion that we should cap our Personal Loan program at 2000L, as, after this point, repayment decreases significantly. We also endorse “lengthening the ladder,” in which we would allow clients to advance up the loan ladder in increments of 250L instead of 500L, allowing us to build a credit history with our clients and increase the number of “safe” loan levels. All loans, starting with the 500L loan, will be repeated 3 times, an essential step if we want our program to be profitable. These changes work towards the goals of our other revisions and gradually move our clients towards the more advanced loans.
If a client fails to repay a loan, they are removed from La Ceiba’s loan program. If, after a considerable amount of time, a client repays a loan, they are re-admitted at the beginning of the loan ladder.
Besides the most obvious changes of the smaller increments and repetitions, much of this program remains the same.