LOAN MANAGEMENT

Loan; A thing that is borrowed, especially a sum of money that is expected to be paid back with interest.

People borrow money for many reasons, for example; to boost business capital, to start a business, to build a house, to buy food.

People can borrow money from, Commercial banks, Microfinance banks, Village banks, from neighbors

Why people borrow money

• To boost a business capital
• To start a new business
• To use the money for agriculture production
• To build a house
• To pay school fees

NB: it’s not good to take a loan and buy food, build tombstones or use for weddings as its difficult to pay back the loan. It’s good to take a loan and invest in something that at the end of the day will help us raise the funds to service the loans

Responsibilities of a borrower

• Paying back the loan on time
• Getting size of the loan according to our business capabilities
• To make sure that the loan you getting is not greater than what you earn. The loan must be less than 30% of your earnings

Consequences of not paying back loans

• Loosing family properties
• Not able to get another loan in the future

Things that a borrower must know before getting a loan

• Interest rate charged
• Repayment period
• Use the loan for the intended purpose
• Repayment dates