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Post on 28-Jul-2020
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Islamic Microfinance Group Liability Lending Mechanism
Microfinance UnitCentral Bank of Sudan
Target Clients
• The entrepreneurial poor in urban and slum districts
Loan application procedures
1) Formulation of liability group :
Interested micro enterprises asked to form a five-person group
Loan application procedures
2) Submission of loan application:
Group members submit loan application with the support of the microfinance program officer
Loan application procedures
3) Collaterals:
Group members sign a guarantee form indicating their agreement to vouch for one another
Loan application procedures
4) Business appraisal :
MF officer does simple business appraisal and submit for approval
Implementation First Step:
Request for documents
Sign of contracts or loan agreement ,
Implementation
Second Step:Purchase of goods and resell to borrows in case of Murabaha or relase of funds in case of profit-sharing modes (Musharaka, Mudaraba…)
Implementation
Third Step:
Open an account for each borrower ; size of installment and due date
ImplementationFourth Step:
MF officer issues receipts to borrowers when collecting loan installments
ImplementationFifth Step:
Collect certain amount weekly from each group member for the insurance fund to cater for emergencies.
Monitoring
MF officer conduct close follow up :
• Random field visits
• Prepare monthly progress report
• Provide technical support if needed
• Prepare final reports
• Lessons learnt and best practices
What Next?
Evaluating the experience
Scaling up of the business
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