Group loans are given to organized groups which are formed by individual themselves. These groups can be made up of employees or entrepreneurs. Group lending eliminates the necessity to have guarantors because the group members are each other’s guarantors.
Group lending provides funds for members of the group to increase their operating capital and expanding their businesses.
Group lending is an easier way to obtain loans for small scale entrepreneurs and employees since they can obtain collateral from each other and group members can facilitate one another in case a member fails to repay his/her debt.
|No need of guarantors for the group||Adequate collateral for each group member (value of each member’s collateral must be at least three (3) times||Interest rates|
|Group members can facilitate each other in repaying loans||At least three (3) group members should be residing in self owned residences||LAF/I/V|
|Interest rates vary with loan repayment period||A group should have not less than five (5) members and not more than seven (7) members|
|Maximum loan repayment period of six (6) months|
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