Tools & Resources Fonkoze: Guide for Credit Agents — Evaluating Clients for Fonkoze’s Post-Disaster Recovery Program

Fonkoze: Guide for Credit Agents — Evaluating Clients for Fonkoze’s Post-Disaster Recovery Program

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Fonkoze shared with the Campaign their “Guide for Credit Agents: Evaluating Clients for Fonkoze’s Post-Disaster Recovery Program,” which guides credit agents in disbursing credit in a post-disaster environment—a time when microfinance clients are particularly vulnerable to over-indebtedness.

FonkozeAs noted in Principle 1, Avoidance of Client Over-indebtedness, all financial institutions should carefully establish the borrower’s ability to afford their loan and repay it. Borrowers should be able to handle debt service requirements without sacrificing their basic quality of life. Similarly, the institution takes adequate care that non-credit, financial products (such as insurance) extended to low-income clients are appropriate to their needs and means.

Fonkoze shared with the Campaign their “Guide for Credit Agents: Evaluating Clients for Fonkoze’s Post-Disaster Recovery Program,” which guides credit agents in disbursing credit in a post-disaster environment—a time when microfinance clients are particularly vulnerable to over-indebtedness.  The guide instructs credit agents to evaluate the different factors that affect a client’s ability to take on debt after a disaster, including their business, living situation, and wellbeing (mental and physical). Additionally, the guide instructs loan officers to make credit decisions in collaboration with the center chief and group leader (client leadership), who know the client best.  These measures help loan officers make quality disbursement decisions and minimize the risk of client over-indebtedness.

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