5/ DAY TO DAY in a VSLA: Time to lend and borrow
The saving round has ended, and the time for loans has arrived. 3 people raise their hands.
Margareth is amongst them, she explains to the group that her son has contracted malaria and she needs to buy medicines. They evaluate the situation and decide to lend her the money from the social fund. She will have 2 weeks to give it back and no interest will be applied, as it is a social emergency.
For the rest of the loans, they can ask for 3 times the amount they have saved in the year.
Rose asks for 30.000 Shillings (7,5€). She needs money to buy tomatoes which she will then sell at the central market, thus generating benefits.
Babara asks 80.000 Shillings (20€) to pay for her children's school fees. One is in Primary and another one in Secondary school.
Both have 3 months to return their loan on a weekly basis. A 10% interest rate is applied which they start by paying as they are given their loan.