microned


5. How high are repayment rates?

Some 97 to 99% of loans from well performing MFIs are repaid. Poor people are dedicated to repay their loans on time because they have only a very few appropriate possibilities to access loans elsewhere and good repayment is conditional to obtain successive loans. Furthermore, MFIs use social pressure: loans are provided to individuals who organise themselves in groups. If one group member does not repay, the others have to repay for him or her and recover the debt later on from the defaulter. Moreover, the financial discipline of clients is tested at the beginning. During a couple of weeks or months clients have to save small amounts to demonstrate their capacity to put money aside. Finally, repayment schedules are being adapted to the client’s possibilities, often resulting in small amounts to be repaid over several months. This reduces the risk for defaults


About Microfinance

  1. 1. What is a micro credit?
  2. 2. What is microfinance?
  3. 3. Why do poor people not go to a traditional bank?
  4. 4. What is a Micro Finance Institution (MFI)?
  5. 5. How high are repayment rates?
  6. 6. Why is some 75% of the clients female?
  7. 7. Can poor people save?
  8. 8. Why do MFIs charge high interest rates?
  9. 9. Does microfinance reach the poorest people?
  10. 10. How do poor people benefit from microfinance?
  11. 11. Is microcredit thé magic cure against poverty?


    1. About MicroNed

      1. 1. What is MicroNed?
      2. 2. Why was MicroNed created?
      3. 3. What are MicroNed’s activities?
      4. 4. Why does MicroNed not directly support MFIs?
      5. 5. What microfinance activities do MicroNed members finance?


        1. Back

MicroNed is a microfinance network of Cordaid, Hivos, ICCO and Oxfam Novib
MicroNed | info@micro-ned.nl | The Netherlands | T +31 (0)70 376.55.16