To help participants pay for their bicycles, BAP developed a financing plan. We collect payments via mobile money once a month.
Other model details include:
Total payment for the bicycle is $100.
Payment period of one year.
Payments cover full cost of bicycle, plus a small mark-up fee to cover operations.
There is a down payment of 15% before receiving the bicycle.
Even though it's an individual loan, participants pay back in village savings group.
The selection process.
BAP has a loan appraisal form to ensure that participants can afford the bicycle loan.
Here are the specific variables that we analyze in the process:
Group dynamic – individuals have to apply in an already existing community group (typically 20-30 people each). BAP analyzes how cohesive the group is, taking into account activity, attendance, and application of internal rules.
Health – including if the individual or a family member has a chronic illness.
Child to Adult Ratio – the ‘dependency’ ratio as we coin it. This indicates another level of need.
Household assets – income can be hard to measure, which is why we look at how much livestock people own or the number of mattresses, phones, tables, etc.
Borrowing history – if applicable. This becomes especially important if they currently have a loan out.
Character reference - one of the most important aspects of our loan appraisal is the individual character reference. We ask the savings group leaders about the individual's trustworthiness, reliability, and attitude.