About 2,000 traders in Accra who would have found it extremely difficult to access credit facility from banks, have been given a collateral-free loan by Capital and More Microfinance, to expand their businesses.
Each of the beneficiaries, predominantly market women, food vendors, spare parts dealers, auto mechanics, phone retailers, taxi and trotro drivers, received between a minimum of GHC500 to GCH5,000.
They have also been given training by officials of the company on prudent savings and finance bookkeeping methods to help them grow their businesses and become self-reliant in order to wean themselves off loans.
Unlike many other loans, beneficiaries of the Capital & More ‘Evergreen’ facility will repay the amount in daily installment, a unique feature to ease the burden of repayment on the traders.
Managing Director of Capital & More, Mrs Akosua Oduma Oppong-Tawiah, who said this, observed that though these groups of persons in the country’s informal sector have viable businesses, they do not have the financial might to grow their businesses.
“The customer journey that we’re looking to have is that by their second or third loan, they should have saved something that can qualify for cash collateral to reduce how much they’ll need from us or even for us to pay them interest on it” she said.
She noted that Evergreen collateral-free loan facility is primarily targeted at traders who are unbanked and have a fixed place of operation as well as a daily revenue stream.
“They usually need a place to bank, they need financial support but if you look at our universal banks and their regulations and how they do their work, these people fall out of the scene easily, so that is where we come in,” she said.
Mrs Oppong-Tawiah said it is against this backdrop that Capital & More decided to design what she described as “a very simple product that allows you to borrow from between GHC500 to GHC5,000 maximum without collateral”.
Under the facility, she said beneficiaries will have 50 days to repay their loans to be able to qualify for another facility, explaining, “we do the repayment schedule in a way that by 50 days, you would have finished paying and then you qualify for the next.”
The MD explained that the reason for giving the traders bookkeeping and saving methods stemmed from the fact that some of them have not been running their businesses as it should.
“Some of them when they come in you realise that it is not that they need credit, they are just not financially disciplined. They haven’t been able to separate their personal funds from the operation funds.
“So we engage them, give them some sort of lessons on finance bookkeeping; we also introduce them to savings. We let them understand that this money you’re picking is not for free; we’re gonna charge you with interest,” she said.
Aside the training, she said the beneficiaries are given a locked gold box [susu box] in which the traders are encouraged to put extra money everyday which will be collected weekly by their relationship officers and deposited in their accounts.
Mrs Oppong-Tawiah said the Evergreen facility which was rolled out in May this year, has helped a lot of traders to streamline their revenue, something she said has put them on a solid path of growth.
She noted: “It’s been very exciting. The market women are very happy and I’m happy to meet these people and serve them because they’re the real Ghanaians. So it’s important that we have products that suit their needs.”
“With this product, we come in with the convenience and the ease to push financial inclusion and to get all of them on-board and be able to access credit whenever necessary,” Mrs Oppong-Tawiah said.
Meanwhile, she said people in Koforidua and Takoradi would from next year get the opportunity to enjoy their products as they move to establish branches in those two regions.
“Capital and More, we are very poised to serve our clientele base and serve them very well,”.
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