The following individuals residing in the Service Area of your branch require financial assistance:
Amount sought Rs.)
Sells sarees on instalment in the neighbourhood. Turnover is about Rs. 2 lakhs/year
School Fees dues of son to be paid. Due to non-payment he is not attending school for last 1 month
Roof of her house is leaking - wants to repair the roof
Husband is handicapped (lower limbs). He is a floor tiles polishing mason. She wants to buy him a secondhand moped
Power connection to house has been disconnected due to non-payment of dues. Children unable to study, watch TV
Does milk vending business. Wishes to buy a second hand refrigerator
1. Please identify, as a banker, what are the additional information you will require from each of the above persons.
2. What credit product of your bank can you offer to each of above persons?
3. If you decide to extend credit, what would be the terms of lending.
4. If you decide not to extend credit, kindly advise the rationale and logic for arriving at such a decision.
Meeting the Small Credit needs of the Rural Clientele
All the above are members of Ramadevi Self Help Group. The SHG has a corpus of Rs. 12,500/- which is in circulation among the group members.
The SHG maintains a Savings Bank Account with the bank and has been in existence for more than one year. Based on a request from the SHG, the bank has sanctioned a loan of Rs. 25,000/- to the group. The SHG is now meeting for the first time after receipt of the Bank loan, to take a decision on the various individual applications.
You are all members of the SHG. You are now at the Group Meeting. Apart from the Bank Loan, the savings and loan instalments collected at the group level is Rs. 1800/-. All the members' needs are genuine and each of them is equally vocal that their requirements should be given priority. You are now required to take a decision on whom to sanction loan and what amount. The time available for taking the decision is 10 minutes.
Case Study on Sanctioning of a Loan , By: E.V.Murray