Microcredit is the extension of very small loans (Microloans) to impoverished borrowers who typically lack collateral, it is designed to support entrepreneurship and alleviate poverty. According to this principle, VIN has implemented Micro-credit project in Jitpurphedi community. Its micro-credit project is implemented by Jitpurphedi Women Agriculture Co-operative Ltd, which was established in 2010 in Tinpiple, that provides a wide range of financial services especially savings accounts, to the poor and encourage them for saving and grant them loan in low interest without taking collateral as well as providing seeds, fertilizers, chemicals and agricultural training to local farmers to improve their living standards and socio-economic status.
However, it is found that some of the loan takers are not paying the loans timely and they spent loans in family expenditure and other purposes despite using such credit into agricultural purpose (productive purpose).
Even though, those loan takers are not paying the loans up to the deadlines. So it is very difficult for co-operatives to recover the granted loans. Members who could use the loan amount in the productive purpose that can generate income and pay their loans timely.
Due to the loan payment problems, VIN supported two volunteers for researching to know the major reasons responsible for the delay in the loan payment. After the research, we found four main reasons for not paying loan, i.e expenditure is more than income, lenders are not using loans in productive income-generating field, there is lack of provision of loan payment in installment so that lenders are not able to pay loan at last date of datelines and Co-operative grants loan without taking collateral. To overcome these problems, VIN arranged special classes to Co-operative members and loan takers about the microcredit process and taught them how to manage personal budget to encourage lenders and farmers for daily saving by minimizing their expenditure in unnecessary things and helping to find other extra income generating ways.
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