Township-Based Microlenders: A Profile

This paper presents:

• A profile of the microlenders operating in townships;
• Views of the microlenders on:
  • Regulatory environment;
  • Constraints and challenges faced;
  • Their potential roles.

The paper states that the research methodology followed was:

• Stakeholders interview;
• Detailed questionnaire.

The paper also provides an overview of international experience with respect to money lenders. It describes the profile of the lenders, including:

• Legal status;
• Human resources and capacity;
• Clients profile and target market;
• Loan size and loan application processes.

The paper examines microlending business with respect to:

• Modes of operation;
• Premises from where lending activities are carried;
• Engagement in other businesses.

As per the paper, the developmental needs of the lenders to ensure their growth and development include:

• Access to funding;
• Training in the areas of:
  • Business management;
  • Customer care;
  • Regulatory issues.
• Awareness and education targeted at consumers allowing them to make informed decisions.

The paper concludes with specific aspects that could be addressed by the new regulator, Microfinance Regulatory Council (MFRC):

• Differentiation of lenders;
• Briefing about the objectives of the government;
• Communication of new regulations to microlenders;
• Provision of capacity building and training to:
  • Microlenders;
  • Clients;
  • Associations;
  • Government.