Process for Accessing Credit

Maata-N-Tudu’s methodology for assessing credits is well documented. There are 12 steps, as described below:

Step 1 – Application for Membership

Group applies to join the Association in the form of a letter. The letter will provide the following details, as minimum:

• The name the Group has selected for itself. If this name conflicts with the name of an existing Group, MTA advices the Group to select another name.
• A list of the individual members of the Group
• The names of the persons designated as group executives. The Group executive should comprise a president, a secretary, and a treasurer, as minimum.
• The bank account of the Group if any
• Usual meeting place

The average size of a Group is fifteen (15) members. The minimum is 10 and maximum 25

Step 2 – Animation

MTA organizes its staff to provide group animation and conveys/informs the group of the scheduled date, time and venue for the program. MTA staff also undertakes a routine animation to vet the Group through meetings with group members. MTA also administers a poverty assessment through a standard questionnaire.

Step 3 – Admission and Registration

If the result of step 2 is successful, the Group receives an admission letter from MTA, to become a dully registered member. The Group is requested to pay a nominal sum as registration fees.

Step 4 – Savings Mobilization

The group is required to make monthly savings for the next few weeks to six months, before it becomes eligible to access credit. The amount of monthly contribution is not fixed, but the group is made aware of the linkage between loan size and savings, i.e. a beneficiary can obtain a loan equal to five times the savings. Minimum savings of 100,000 cedis and a maximum of 400,000 cedis is permitted for first time beneficiaries of credit The Association frowns on member groups making a one-off deposit of a large amount just to qualify for a loan.

Step 5 – Application for Loan

When a Group becomes eligible for a loan, i.e. after the initial three-six months, it can submit an application for a loan. The Group completes a formal loan application form, on which it provides the following information:

• Name of the Group
• Region
• Total amount requested by the group (in words, and in figures)
• Number of member loan applicants
• Loan type (product name)
• A schedule showing the names, economic activity, amount of loan and the signature/thumbprint of each member applicant
• The president, treasurer, and secretary of the association also sign/thumbprint and date a loan guarantee form.

Step 6 – Loan Appraisal

The Credit Officer carries out a loan appraisal to establish eligibility, verify the accuracy of the information provided on the form, and assess the ability of the borrower to pay. The officer submits his/her findings and makes appropriate recommendations to the Credit Coordinator, recommending approval or rejection of the application.

Step 7 – Loan Approval/Rejection

The Credit Coordinator submits his comments to a Loan Review Committee, which has the final say in approving or rejecting the application.

Step 8 – Pre-disbursement Training

If a loan is approved, the Credit/loan officer prepares and delivers a pre-disbursement training to the successful group. During this training, the Group receives instructions on, business/credit management among other topics.

Step 9 – Loan Disbursement

The accounts department will be requested to prepare a cheque for the amount approved, in the name of the Group. Actual disbursement takes place only after completion of the pre-disbursement training. The standard mode of disbursement is direct payment to the bank account of the group.

Step 10 – Loan Recovery by Loan Officers

The Loan officers regularly monitor repayment instalments in order to ensure timely payment of instalments. This enables them to detect late payments so that they can take remedial action to collect overdue amounts before it becomes too bad.

Step 11 – Loan Monitoring by Loan Officers

The Loan officers monitor groups soon after loan disbursals to ensure that individual members have collected the various amounts due them as in the loan application. Loan officers, internal audit also conduct routine visits to groups to check records/passbook entries, and provide support to group on any other related issues of concern.

Step 12 – Reporting to Technical Committee

All reports to be submitted to the technical committee would be generated from the finance and operations department and submitted to the Executive Secretary for collation and subsequent reporting to the Technical committee.