Services

Asala has three Loan Programs:

    1.  Micro Lending Program

    2. Small Lending Program

   3. Islamic financing program

 1. Micro-Lending Program (Group and Individual Loans) :

Target Client Description

Based on Asala's current clients and market study, a typical micro-business owner can be described as follows:

Micro Business Entrepreneurs

Characteristics

Low-income women (monthly family income of $700 or less)
Not in debt to any other credit institution
Knowledgeable about their activity
Business assets in the range of $100-$2,000 and generally employ one to two people.

Financing

Primarily need working capital financing in the range of $300-$1,500 (Group lending).
For larger micro-businesses can use asset acquisition financing in the range of $1,000 - $5,000 (individuals).
The large majority of micro entrepreneurs can not access bank financing due to lack of collateral/guarantors and/or providing bank procedures and requirements.

A .Micro Business group loan

The Asala Micro business group product is based on best practices for solidarity group lending.

Group Lending :  

Loan Sizes :$ 300- $1,500, in Gaza,$500-  $1,500 in West Bank  .

Purpose :  Working capital or small asset acquisition

Loan Term: 4-18 Month (Group choice Depending on loan sizes and purposes) .

Guarantee :  Group Guarantee provided by Groups of 5-15 clients ( average 8 clients) .

Repayment Frequency :   Monthly ( whole group pays together at monthly meeting)

Savings :   Required savings of 10% of the loan amount.

Special Features :  Open to start-up; low initial loan size has been chosen in particular to encourage start-ups

As long as repayment is successfully completed by the group, another loan will be disbursed.

The size of the loan increases gradually.

B .Micro-business individual lending

Clients who demonstrate superior credit- worthiness are eligible for individual products. Two separate individual loans are available- Opportunity loans and Asset Acquisition Loans.

Opportunity loans :

Eligibility :

• after two cycles of on- time repayment, no arrears and high attendance in the group.
• can be taken in additional to group loan .

Purpose : Working  capital for seasonal demands or other opportunities .

Loan size : $250-$1000 .

Loan Term : 1-6 Months .

Guarantee : Contract Witnessed Lawyer, 1 guarantor .

Repayment Frequency : Monthly .

Savings : No extra savings requirements

Special Features : Available within two weeks of request

Asset Acquisition Loans.

Eligibility : After four cycles of on- time repayment, no arrears, and high attendance

Purpose : Asset Acquisition

Loan size : $1000-$5000

Loan Term : 1-2 Years

Guarantee : Notary Deed; contract Witnessed by lawyer; 1-2 guarantors

Repayment Frequency : Monthly

Savings : No extra savings requirements

Special Features : Short business plan   (developed with Asala). Available within 3-4 Weeks

  In the west bank, clients with good potential can access the Asset  Acquisition loan without passing through the group product if they bring two guarantors.

   

    2. Small Lending Program (Individual Loans) :

Product Description

The individual loan product is designed for women entrepreneurs who want to begin or expand a small enterprise in sectors such as manufacturing, trade, services, and agriculture. Loans are for productive purposes such as working capital, the purchase of fixed assets or improvements in the business site.
Loan terms are as follows:

• Loan amounts from $5,500 - $20,000.
• 12 - 36 month loan term with monthly payments.
• Grace period of one to six months depending on type and status of business.
• Two guarantors are required to sign notary deeds in order to guarantee repayments.

 Small Business Entrepreneur Characteristics

Small business entrepreneurs range from low (monthly family income $700) to middle income (monthly family income of $1300) women. They have a secondary school or university education, are married, and have small families (up to four children). They generally have some business or professional experience prior to applying for loan financing. In many cases, the business serves as (has the potential to serve as) the primary source of income for the family. Their businesses focus on the trade, production and service sectors and need financing to improve their business site, buy fixed assets or, in some cases, as working capital. Financing for the majority of these businesses is in the $5,000 - $10,000, while some, mostly professionals can use loans from $10,000- $20,000. These entrepreneurs can sometimes access bank financing (25%) since they may already have capital assets or can find guarantors, but do not due to mistrust of banks or lack of confidence in the profitability of their businesses (due to a lack of business planning skills).

Delivery

Asala provides its individual small lending product through program coordinators (PC) and loan officers (LO) based in branch offices in the West Bank and Gaza. PCs and LOs meet potential clients through field visits, client visits to the offices, and during information sessions about the individual loan product held in local associations or community centers.

Methodology

To obtain an individual loan, the applicant must fill out an initial loan application with the program coordinator (PC) or loan officer (LO). If the client meets basic criteria, the LO visits the business and completes a primary loan application that includes a profit and loss statement for the applicant. Afterwards, the loan program coordinator conducts a credit and market analysis for the project to ensure that client can effectively use the loan and complete repayments. Once the application and analysis are completed, the LO forwards the file to the loan application committee (LAC). The LAC reviews applications every week. If accepted, the applicant opens a bank account (for the loan transfer) and with the guarantors signs the loan contract and notary deed. Repayments are paid into Asala's bank account on monthly basis in nearby bank branches.

3- Islamic financing program  : 

• Loan amounts from $1000 - $15,000.
• 12 - 36 month loan term with monthly payments.
• Grace period of one to six months depending on type and status of business.
• Two guarantors are required to sign notary deeds in order to guarantee repayments