Irresponsible Lending – Some Lessons
I am sitting in the modest headquarters of GHAPE in Bamenda, north west Cameroon.
I am surrounded by the membership books of some of the organisation’s small borrowers, detailing their loan totals and bi-monthly repayments. There is no column for defaults. When the women (it is mostly women) meet to make their regular contributions they stay in the room until the right amount of money has been collected. If someone cannot make their payment then the others have to make up the difference. But they all know each other and it’s never good to be embarrassed in front of your neighbours.
Across the office, Eric is counting the notes and coins collected this morning. And on the radio they are talking, appropriately, about loan defaults. But not in microfinance. It’s the BBC World Service and they are discussing the inadequacies of financial regulation in the West and the embarrassment of Northern Rock, the bank which had to be rescued by the UK government.
It rather got me thinking. Perhaps I could organise a fact finding mission to GHAPE’s offices for the battered bosses of Britain’s Financial Services Authority. I’m sure they could learn a few lessons.
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