Tool Set: Lending Practices and Loan Terms in
the Bylaws
Audience
Village bank management committee, bank members; agency staff in training
Purpose
To provide an overview of lending practices and detailed discussion of various loan terms to be determined in the village bank bylaws.
Frequency
Upon bank formation; as needed thereafter
Description
Set of short forms to guide discussion of bylaws; includes examples; lesson
Strengths
Simplicity, ease of use; comprehensive; allows implementing agencies to establish standard requirements
Limitations
Requires a good facilitator who is well versed in each option and able to direct the discussion without imposing personal preferences
Overview of Tools Loan Policies (Discussion Guide) This small-group discussion covers issues of internal account loan eligibility, purposes, duration and maximum loan amount.
Selecting an Interest Rate (Exercise) This tool presents three case studies covering interest rate options, and includes a set of questions as a follow-up to each.
Selecting a Repayment Schedule (Exercise) This two-part role play presents two opposing scenarios for establishing repayment schedules to encourage debate, and follows with a series of questions for the group.
Establishing Sanctions (Exercise) This exercise includes a role play to help bank members establish late-payment policies that reflect the style of the village bank.
Tool Set: Lending Practices and Loan Terms in the Bylaws
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