Getting schooled at your bank
In addition to loans (and savings accounts, social work, and coming soon – insurance) Alidé, Kiva’s field partner in Benin, offers formations, or training sessions, to its clients. Some are optional but there are three that are actually mandatory for a loan.
The first class is an informational session, discussing credit in general and Alidé’s offerings as a company. The second class is about health and staying healthy. The number one reason clients don’t pay back their loan is for health reasons, so this class is less of a public service than an attempt to get a better repayment rate. The third class talks about how the actual loan works, what the client has to do, what the credit officer will do.
Class is usually held at the courtyard of an agency and starts with everyone singing a community-boosting national song together. Then the credit officer presents the material. People ask questions throughout, in a manner that shows their interest and involvement. It’s a really great experience for all (especially me!).
The only thing that isn’t great about the classes is that it adds cost to the loans. The interest rate for most clients is already 24% (which actually isn’t that high considering the cost Alidé takes on in borrowing it’s own resources plus inflation and the cost of visiting these borrowers in the field), but attending these classes and later going to the agencies to make deposits raises the costs of a loan to almost 40% (as estimated for a recent study on social impact). That is quite a lot, though I guess it’s still better than no credit.
Alidé’s loans sell out quickly, click here to see if there’s any available right now.
To join the Friend of Bénin lending team, click here.
Marie Leznicki is a Kiva Fellow serving her placement with Alidé in Benin.