LOAN AND CBU UPLiFT Methodology

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LOAN AND CBU UPLiFT Methodology

• UPLiFT Network India

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Introduction

• Loan and CBU scheme How does it work?
• How to compute the Loan Parameters without a
  computer?
• How to present this in our every day promotion of
  the UPLiFT Loan and CBU Program.

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Agenda

• Overview of the UPLiFT Loan and CBU Scheme
  strategy 15 min.
• Vocabulary 15 min.
• How works an UPLiFT Scheme? 60 min.
• How to manage my savings with UPLiFT? 45 min.
• Summary 15 min.

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Overview in philosophy

• Taking long term decision for a better quality of
  life can also be achieved through a good money
  management.

Work
Health
Education
Relations
Happiness
Food
Stability
Confidence
Trust
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Overview Practically
2nd loan 3000 3 months 2250 CBU.
3rd Loan 6000 3 months 3750 CBU.
1st loan 1 500 2 months duration, 750 CBU.
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Vocabulary

• I Monthly Interest Rate (non-degressive)
• i Daily interest rate I / 30 days
• A Amount of the Repayment
• Ai part of the interest in this repayment,
• Ap part of the principal in the repayment
• Ac Part of the CBU in the repayment

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Vocabulary

• P Principal or Loan amount
• T number of repayment per week.
• CBU Share of the principal saved for Capital
  Build Up,
• Nc Number of Collection
• L Length of the loan in days
• SD Start day of the collection
• RD Release date of the loan
• GP Grace Period

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How works an UPLiFT Scheme?

• What is the loan amount that I can get?
• How much shall I repay?
• What happen if I repay earlier or sooner than the
  length of the loan of the contract?

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What is the loan amount that I can get?

• It depends on the Business Plan !
• 1st Case First Loan and I Have no saving
  Maximum will be 1500 Rs.
• 2nd Case I have saved some money. Then the
  maximum loan amount will be the Minimum between
  4 times the savings amount and Twice the previous
  loan amount.

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Example

• Mr. Penniless wants to buy a rickshaw and wants a
  30 000 loan without any savings
• 1500 Rupees for the first loanof many bigger
  ones!
• Mr. Good-partner comes after its 5th loan of 5000
  for a 6th loan, he has saved 2000 Rupees
• Mini(5,000x2 2,000 x 4) 8,000 Rupees

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Exercise

• Mr. Hole-in-the-Pocket wants to buy a handcart
  with a 5,000 loan with 200 rupees in savings
• 1500 Rupees as a first loan!
• Mr. Good-partner comes after its 6th loan of 8000
  for a 7th loan, he has now a total CBU of 5000
  Rupees
• Mini(8,000x2 5,000 x 4) 16,000 Rupees

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How shall I repay?

• AS YOU WISH !
• How much do you want save during this loan
  repayment? (mini 25)
• From your business and your family budget, how
  much can you pay daily for both CBU and Loan? (A)

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Loan Parameter Computation

• i I / 30
• Ai i x 7 / T x P
• Ap (A Ai) / (1CBU)
• Nc P/Ap
• L Nc x 7 / T

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Example

• We give a 8,000 loan to Mr Good-Partner, at a
  rate of 2.1 per month. He wants to save 2000
  loan amount, and he is ready to pay 70 Rs daily.
• T 6, I 2.1
• P 8,000,
• A70,
• CBU2,000/8,000 25

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Example Loan Parameter Computation

• i 2.1 / 30 0.07
• Ai 0.07x7/6x8000 6.53
• Ap(706.53)/(125) 50.77
• Nc 8000/50.77 157.57
• L 157.57x7/6 184
• 184 / 30 6 Months 4 days

• i I / 30
• Ai i x 7 / T x P
• Ap (A Ai) / (1CBU)
• Nc P / Ap
• L Nc x 7 / T

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Exercise

• We give a 1,500 loan to Mr Penniless, at a rate
  of 2.1 per month. He wants to save 750 loan
  amount, and he is ready to pay 20 Rs daily.
• T 6, I 2.1
• P 1,500,
• A20,
• CBU750/1500 50

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Exercise Loan Parameter Computation

• i I / 30
• Ai i x 7 / T x P
• Ap (A Ai) / (1CBU)
• Nc P / Ap
• L Nc x 7 / T

• i 2.1 / 30 0.07
• Ai 0.07x7/6x1500 1.225
• Ap(201.225)/(150)12.52
• Nc 1500/12.52 119.8
• L 119.8x7/6 140
• 140 / 30 4 Months 20 days

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How much is the total amount to be paid on
Maturity Date?

• MDMaturity Date Start Date L
• I Ai x Nc
• P I CBU is to be paid on MD

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What are the maturity dates and the total amounts
for MM Penniless and Good-Partner?

• MM Good-Partner and Penniless started to be
  collected on 16/10/2000
• MD Good-Partner 18/4/2001
• PICBU80001029200011029
• MD Penniless5/3/2001
• PICBU15001477502397

• MDMaturity Date Start Date L
• I Ai x Nc
• P I CBU is to be paid on MD

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What happen if I repay earlier or sooner than the
length of the loan of the contract?

• More than 15 days before? Rebates of the
  interest!
• More than 15 days after? Penalty interest at 3
  a month on the balance PI to be repaid.

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Example

• Mr Penniless, has repaid a total amount of 1325
  on the Maturity date of his loan instead of
• 1500 1.225 x 119.8 750 2397
• Without the CBU 1647 was expected so the
  balance is
• 1647 1325 322
• So in march 2001 322 3
• 10 additional Rupees will be asked.

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What happen at the end of the repayment?

• The partner can
• Withdraw its CBU,
• Transfer it on its CBU Passbook,
• Go for another Loan,

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Summary

• We learnt today
• How does an UPLiFT Scheme Loan CBU works,
• How to compute the different parameters of a
  loan?
• What happen in case of quick/slow repayment,
• How to handle the CBU,

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Where to Get More Information

• From the paper training modules
• From experience Let us start with this
  Homework
• Imagine a success story of 10 loans with all the
  parameters of each loans, and the story attached
  to the person. How will he start? How much will
  be his successive loans? What happen if he needs
  some savings during the loan?