The loan repayment procedure is different on the basis of loan amount duration and purpose in micro-credit process. A loan is to be replayed mainly through installments of different duration in this process. Generally, after two weeks from the date of loan receiving it is to be repaid through weekly scheduled installment. Total amounts of loan received and the service charge is to be repaid through equal installment in the loan duration. In the micro-credit process the loan is disbursed generally for one year and the total amount i.e. loan plus service charge are to be repaid within 50 weeks including 2 weeks grace period. It is hoped that the member will invest the loan money in an income generating activity so that he/ she will be able to earn within two weeks and will clear up the weekly installment accordingly. But the favorable environment is to be ensured so that he/ she is facilitated to earn some additional income for repaying the loan installment by utilizing the unused resources, increasing capacity, analyzing the family income & expenditure and building up awareness. In the micro-credit system, side by side of the one-year duration loan, the seasonal loan, long term, and other loans are disbursed. On the basis of a loan amount, duration and investment, the amount of installment is to be decided depending on the nature of earning such as-
one year term Loan: If any member takes 1000 taka loan @ of 15% service charge (sample rate), just after one year he is to pay taka (1000’00 + 150.00 service charge) = Tk. 1150.00. To repay Tk. 1150.00 in 50 installments, the amount of per installment will be (1150 / 50) = Tk. 23.00 only. In government holy days, a problem arises to collect installments for various reasons. As a result, the weekly meetings in government holidays, as well as a collection of installment, are not carried out and hence 46 installments instead of 52 weeks are collected and in that case, the amount of installment will be (1150 / 46) = 25.00.
In the continuous reducing process, the amount of service charge is to be calculated after complete repayment of the loan. As a result, the disbursed loan is to be collected in 50 equal installments and then the service charge will be calculated and collected in the following week accordingly.
Long term loan: In this case, the loan money is to be invested within a certain period under compulsion and this period will be counted as grace period of the loan. During the rest period, the loan amount and the service charge are to be replayed in installment.
Seasonal loan: The loan taken to invest in a certain season is known as the seasonal loan. This investment yields income at the end of the season. Hence as per contract the loan amount and the service charge are to be repaid in one or more installments within the time.
Other loans: The disbursed loan as per the demand of the members or the locality is to be replayed along with the service charge according to the contract.
In a case where income is not generated as soon as the loan money is invested or there is no opportunity to repay the installment from alternative income, in that case, offer generating income from the invested money the loan is to be replayed at a time or in scheduled installments.
On the day of the group meeting, the installment and the passbook are to be deposited to the staff. The staff will write down the money received in the passbook and after signing he will return back the passbook to the member. The member will verify whether his/ her deposited money has been entered into the passbook or not.