Savings and Credit
At M-ASCA we pool resources together through savings and borrow three times our savings after one month. The waiting period is significantly reduced because members can save anytime even twice a day. Consequently because most of the members are in business, it is illogical to lock in funds for long as these funds can be turned around several times in that period.The borrowed funds are used for business start ups, boosting existing businesses, savings or other viable needs. Loans advanced to members attract a 1% interest per Month. The interest is crucial in growing businesses whose profit margin may not be huge. The aim is to create sustainable business activities for small scale entrepreneurs, and to be that stepping stone to traditional banking products.
Consequently those in the informal sector may not have payslips to facilitate check off savings and repayment of loans but their income is irregular and determined on day to day basis. M-ASCA mobile platform allows members to remit both savings and loan repayments anytime anywhere and in flexible amounts according to their daily earnings.
At M-ASCA we recognize that man hours are crucial to the success of small scale businesses and avoid wasting time in meetings . All processes are electronic undertaken at the convenience of members, in addition, not every member is literate, our simplified model designed to enable use to the deskilled ensures that members manage their financial affairs comfortably. M-ASCA is a paperless association. Transactions are real time and people can view the status of their accounts at the touch of a button: M-ASCA endeavors to be a transparent and accountable organization driven by the need to genuinely change the lives of members.
M-ASCA recognizes the different social support structures in the country and factors in group saving, where members of a family or an organized group like chamas come together and save into a common kitty here referred to as “super guarantor”. Members of the group get guaranteed from the common kitty, and any money leaving the common kitty (super guarantor) must be confirmed by the signatories. The system also helps in mobilizing savings either through the temporary account or the loan savings account.
We value happy families; at M-ASCA we do not storm into peoples homes to recover house hold items at the distress of children in the family. We have developed a guarantor system where members have to request for guarantors in person, there is that personal relationship besides being M-ASCA members. This intimacy makes borrowers shy off from defaulting and strive to repay their loans in time to avoid disappointing their significant others. Because of the relationship which is beyond the loan, members share their ups and downs with their guarantors through and through. This is unlike other models where people are bundled together to create a certain number without which none of the members is given a loan. Such models create automatic guarantors for borrowers and those who default have no relationship with those who guaranteed them in the group and feel nothing when savings are recovered from their guarantors to pay off their loans. More often than not such groups are formed for the purpose of borrowing and nothing else. It also is in such mechanical associations where inhuman and cruel methods are used to recover unpaid loans.
As a members association members enjoy proceeds of the association activities through dividend sharing at the end of each financial year,
We currently have three types of loans
1. The ordinary loan which is three times a members savings guaranteed by members
2. The emergency loan which is 2/3rds a members savings with or without guarantors and payable in a year
3. Instant loan which is a maximum of 10,000 and not more than half of members savings. This loan is payable in a month.