ADMAS University

Faculty of business
Department of Accounting and finance

(Lending strategies and effectiveness of MFI. The case of Awach MFI)

A senior Essay proposal Submitted for the
Bachelor of art Degree in Accounting and finance

By
Dagim kumlachew 2387/18
Dagmawit Kassahun 2650/19
Eden kassaye 2482/18
DerartuYimam 2381/18
Hana Alebachew 2351/18
Advisor;YeneneshNigussie
Addis Ababa,Ethiopia….2021
 ACKNOWLEDGEMENT

First of all our thanks goes to the almighty of God for letting us stay in life to this day and
enables us to complete our academic life. we also would like to express our deepest gratitude
to our advisor Yenenesh Nigussie for her enthusiastic support from the preparation until the
final discussion of this paper with frequent follow up with receiving in detail, main body of the
paper and forwarding constrictive suggestion.

we am greatly thanks for our family they had been assisting our schooling life and to give advice
how can we go with our planning activity to finish our academic schooling in this collage.

Finally we would like to acknowledge all individual and institutions that have helped us
materially and morally during the preparation of this paper.

i
 ABSTRACT

The establishment of microfinance organization in every country is an essential part of every

community . This research is conducted to the assessment lending strategy and its effectiveness
in Awach microfinance.

The objective of the study is to assess the lending strategies Awach microfinance use and how
effective it was for its customers particularly.

In collecting data the researchers primary source of data. The primary data collected from
questionnaire and through interview to the customers that had taken a loan from Awach
microfinance.

The sample used for this research were simple random sampling techniques.

The data analysis would be carried out based on tabulation and percentage method and
interpreted accordingly.

During the study major limitations like shortage of finance, lack of sufficient written materials
from the organization & shortage of time.

Finally summary, conclusion and recommendation on alternative sources usage are forwarded
to combat the possible solution.

ii
Title Page
Acknowledgment ………………………………………………………………………………i

Abstract………………………………………………………………………………………………ii

Table of content ……………………………………………………………………………….iii

Chapter One

1. Introduction …………………………………………………………..1

1.1 Background to the study ...............................................................................1

1.2 Statement of the Problem…………………………………………………………….2

1.3 Objective of the study.......................................................................................3

1.3.1 General objective…………………………………………………………………….2

1.3.2 Specific of the study ……………………………….……………………3

1.4 Research Questions ……………………………….……………………………………..3

1.5 Scope of the study .........................................................................................4

1.6 Significance of study………………………………………………………………….4

1.7 Organization of the paper……………………………….4

1.8 Definition of term and concept………………………………..4

1.9 Reference……………………………………………………………4

Chapter 2

2. Related Literature Review ..................................................................................5

2.1 Theoretical Review of Literature…………………………………………………………………………….5

2.2 Empirical Review of Literature……………………………………………………………18

 iii

Chapter 3

3.1 Research Area………………………………………………………………………………………. 19

3.2Methodological approach……………………………………………………………………..19

3.3 Methods of data collection ………………..………………………………………………………19

3.4 methods of analysis…………………………………………………………………………….20

3.5 Sampling methods…………………………………………………………………………………20

3.6 Source of Data………………………………………………………………………………..21

3.7 Work schedule………………………………………………………………………………..21

3.8 Logistics……………………………………………………………………………………….22

3.9 References……………………………………………………………………………………….22

4. Chapter 4 …………………………………………………………………………………………23
 Chapter 1

Introduction
1.1Background introduction
1.1.1 Background of the study
A financial institution specializing in service for low income groups or individuals. A micro
finance institution accounts service to small balance accounts that would not normally be
accepted by traditional banks and offers transactions services for amounts that may be smaller
than the average transaction fees charged by main stream financial institutions.(www.investor
words.com//7362/mf)
By definition , MFI provides credit. Regardless of the approach selected, the actual loan
products need to be designed according to the demands of the target market. simply stated,
microfinance refers to the offering of financial services to poor and low income people.
Traditionally, the poor have considered “high risk” and have not be well served by institution
like bank, mutual funds, and credit card companies. A central goal of microfinance is poverty
alleviation.
Loans can be tied to the lifetime of the equipment or other assets you're borrowing the
money to pay for. At the beginning of the term of the loan you may be able to negotiate a
repayment holiday, meaning that you only pay interest for a certain amount of time while
repayments on the capital are frozen.(www.britannica.com)

. The main principle of lending strategies and effectiveness system is to give loan to small
balance account and managing the lending procedures and follow up. In managing of loan
disbursement take in to account the criteria’s needed to be fulfilled by the borrower to get loan
by the client, is important in deterring the performance of the clients of the micro finance
institutions, also simplify to activity of the information to re collect the loan

The researcher concentrated on micro finance institution in Awach MFI .one branch of
micro finance institution is operating in loan disbursement and effectiveness system. According
to this study the researcher would used to evaluate lending strategies and effectiveness system.

1
1.1.2 Background of the organization
Awach Microfinance institute is a well know MFI throughout Ethiopia for reason those include
the interest rate, the accessibility.
Awach Saccos mobilizes the members' voluntary and regular savings by granting loans to its
members so that they could go on and work in different sector whereby they could increase
their income and change their lives for the better. The Loan requirements and categories are
set by the general assembly of the society.
Right now Awach saccos has expanded it product portfolio Awach has a high reputation
compared to most MFI found in Ethiopia specially in the interest rate it has to offer explains
why this particular research topic is important and essential to understanding the main aspects
of this study. Awach was founded in 1999 Ethiopian calendar.
Awach started with only 41 members in 2007 G.C. With its great effort currently Awach has
more than 20000 members. The loan interest rate is 13.5% per year for social or business loans,
14.5 % per year for the vehicle loan and 15.5 % per year for the house loan. The interest is paid
on the remaining loan and the system of calculation is called Amortization. Currently, Awach
has disbursed loan that amounts over Br. 372,400,479.00 Ethiopian birrs for more than
6500members. A thorough post-credit evaluation shows that more than 99% of credit users
have utilized their loans to open their shops, construct houses used for renting, own business
cars, and most members able to participate in different business activities to increase their
income. Awach’s credit service has benefited its women members in many ways. Numerous
women members have an exit out of destitution, started supporting their family and quite
several women expand their business by multiplying their investment.
(www.awachsacc.com/english/context/company-profile) access date 5:30AM 7/27/2021
1.2 Statement of the Problem
Financial intermediary especially micro finance institution have very important role in the
economic development of the nation. They give loan to people who low level of income.

Awach Micro finance institution is different from other financial institutions because micro
finance always fail due to the borrower do not recover their loans from the micro finance .micro
finance institutions are require criteria to fulfilled by the borrowers to get loan in order to
perform their accountability.

2
Generally many researcher over looked the research on the following base. The increasing
amount interest in loan is very problematic to customers, cash is the most liquid asset and needs
goal management and attractive policy, the higher liquid asset the higher the risk of default
associated with, this risk can be used by different factor like absence sound credit policy to make
adequate study before garneting credit, weak follow up and control, group collateral may lead to
poor collection effort when a group member is unable to pay its obligation. On the other hand,
insufficient borrowers experience and knowledge to operate smell business on credit basis.

(Berhe, 2009)

1.3. Objective of the Study

1.3.1. General objective

General objective of the study is to understand and to evaluate Awach Microfinance Lending
strategies. This in turn will help both the customers and organization by providing better
lending strategies, the general objective also include to understand the draw backs of the
services given out by Awach Microfinance and to help them build more reliable customer
service.
1.3.2 Specific objective of the study
-To understand the requirements/criteria heeded to be fulfilled by the borrowers to get a loan.
-Analyze the factors affecting the effective lending strategies for Awach MFI
-To determine how Awach MFI increase its profitability
-To understand how customer activity and saving affect Awach MIF
-To understand customers are satisfied with Awach MFI lending strategies and its effectiveness
1.4. Research Questions
The lending strategies and effectiveness system is the key indicator for the performance of
micro finance institutions .Therefore; the recent research would study of loan and effectiveness
system based on the following points.
-What are the requirements/criteria’s heeded to be fulfilled by the borrowers to get a loan?
-What are the factors affecting the effective lending strategies for Awach MFI?
-How can Awach MFI increase profitability?
-How can customer activity and saving affect Awach MFI?
 3

-How much customers are satisfied with Awach MFI lending strategies and its effectiveness?
1.5. Scope of The Study /Delimitation of the study
For the scope of the study the research focuses of microfinance institutions. The chosen MFI is
Awach microfinance Institution (Aware Branch which is the main branch). From there financial
activities the research is focusing on Awach MFI lending activities.

1.6. Significance of the Study

Significance of this study is very high. Not only to study the lending strategies it use but to know
the effectiveness of the study that is important both for the MFI itself also for people who want
to get loan from this institutions.
For researchers this research will help them jump start on understanding in the study of this
title by providing information and feed back to there questions. This research will also help law
makers understand the nature on how effective there methods are its easy to track the
progress of the MFI.
1.7. Organization of the paper
The paper is organized as follows; as it have been shown in the above section chapter one holds
a general introduction of the research and explained the problem as well as showed the
significance of the research.
In chapter two relevant theoretical and empirical literatures are reviewed and that is followed
by the definition of the data used and the methodology employed in the study in chapter three.
1.8 Definition of Terms and Concepts
MFI- Microfinance Institution
CB- Commercial Bank
1.9 Reference
-www.awachsacc.com/english/context/company-profile
-http://www.awachsacc.com/english/sites/default/files/Awach%20SACCOS%20Ltd%20-
%20May%2019%2C%202018.pdf
- www.britannica.com
- www.nibusinesinfo.co.uk

Chapter 2
LITERATURE REVIEW
Theoretical review of literature

2.1 Concept of credit

The word credit comes from Latin ‘’credo ‘’ meaning I trust. Money lenders trust borrowers to
pay them back credit is borrowed funds with specified terms for repayments. When there are
insufficient accumulated savings to finance business and when the return an borrowed funds
exceeds the interest rate charged on the loan it makes sense to borrow rather than post pone the
business activity until sufficient savings can be accumulated, assuming the capacity to service
the be exists (water field and Duval, 1996).

Credit enables people to obtain goods and services even if they do not have enough money to
pay for them right away. Most modern credit is extended through specialized financial
institution of which commercial banks are the most important ones. But at present MFIs also
play a great role in fund mobilization and credit facility service to poor, micro and small
enterprise there are three major categories of credit

 Consumer credit; enable consumers to spend more money than they have at the time.

 Commercial credit; this is used by companies to develop their business. They expect to
repay the one from their operational profit. Most of these loans are repaid within six
month and so are called short term credit.

 Investment credit: - is alone paid back over a period of along of as long as thirty years or
more. These kind of loan are called long-term credit. Loans are generally made for
productive purpose that, to generate revenue with in business. Some microfinance
institution (MFIS) also make Loan for consumptions, housing, or special occasions.
 While many MFIs insists that only productive be made, any loan that increases the
liquidity of the household frees up enterprise revenue, which can be put into the Business.

2.1.1 Individual lending: - MFI have successfully developed effective models to lend to
individuals, which combine formal lending, as is traditional in financial institutions, with
informal results, collateral, and character. Formal sector lenders have also proven the use fullness
of personal guarantors to motivate clients to repay loans. They have demonstrated that the value
of businesslike approach and the importance of achieving cost recovery in their
lending operations. Finally, they have established the importance of external regulations to
safeguard client savings and the institution itself.

Characteristics of individual lending model include (water field and Duval, 1996)

 The guarantee of loans by some form of collateral or a consignor.

 The screening of potential clients by credit checks character references.

 The tailoring of the loan size and term to business need.

 The frequent increase over time of the loan size and term.

 Efforts by the staff to develop close relationships with clients so that each client
represents a significant investment of staff time and energy.

2.1.2 Group based lending: - involves the formation of groups of groups of people who have a
common wish to access financial services.

Group lending approaches frequently built on or imitate informal lending and savings groups.
These groups exist in virtually every country and are called by various names.

Group – lending approaches have adapted the modes of rotation saving and credit associations,
which are informal groups developed by their members at the grassroots level, to provide
additional flexibility in lone size and terms and generally to allow borrowers to access funds
when needed rather than having to wait for their turn. to that stated.
 6

2.2 credit standards

Credit standards are the criteria which a firm follows in selecting customers for the purpose of
credit extension. THE firm may have tight credit standards; that is, it may sell mostly on cash
basis, and may extend credit only to the most reliable and financially strong customers. Such
standards will result in no bad-debt losses, and less of credit administration. But the firm may
not be able to expand sales. The profit sacrificed on lost sales may be more than the cost saved
by the firm. On contrary, if credit standards are loose, the firm may have larger sales. But the
firm will have to carry larger receivable. The cost of administering credit and bad- debt losses
will also increase. Thus the choice of optimum credit standards involves a trade- off between
incremental return and incremental cost. (Pandy, 2005)

2.3 The bases of credit

After gathering the required information, the finance manager should analyze it to find out the
credit worthiness of potential credit customers and to see whether they satisfy the standards of
the firm or not. The credit analysis will determine the degree of risk associated with the account,
the capacity of credit customer to get goods and service and its ability and willingness to repay.
Often the selling firm not only must determine the credit wordiness of customer is capable of
supporting. One this is done, the firm can establish line of credit the maximum amount the
customer can own the firm any point in time.

The line of credit are established to eliminate necessity of checking major’s credit each time a
large purchase is made.

The credit analyst’s job is to synthesize all information that has been collected and reach
judgment regarding the applicant’s credit worthiness. To perform this synthesis and analysis, it
is useful to have some mechanism for organizing the information that has been collected. One
 tradition way of organizing this information is by characterizing the applicants on dimension the
five “Cs” of credits.

These are:-

Character: it is the applicant’s record of meeting and post obligations financial, contractual and
moral. Past payment history as well as any pending or resolved legal judgment against the
applicant would used to evaluate its character. In assessing character, the credit analysts
consider all the information that relates to willingness to pay debts the questions based on
character are;

 What the applicant’s history of payment to loan?

 Has the applicant defaulted to other loan supplier?

 Does as applicant’s management make a faithful effort to honor debts as they come due?

Capacity:- it is related to the applicant’s ability to repay the requested credit. This dimension
has MFI’s capacity to run business and the applicant’s plant or physical capacity.
Management’s capacity to run the business relates to the competency of the management
personnel is in the applicant’s operations. Any information relevant to this capacity is assessed,
including personal impressions, the history of success or failure by the mangers running the
applicant business, the number of years that the applicant has been in and son fort.

Capital:- it is the financial strength of the applicants as reflected by its ownership position. To
assess the capital dimension, analysis of the applicant’s debt relative to equity and its
profitability ratios are frequently used. The credit analysis, considers the data obtained from the
application’s financial statements. The usual procedure is to perform extensive ratio analysis,
comparing the applicant’s financial ratio to ratios for the applicants industry and performing
trend analysis of the applicant’s ratio over time.

Frequently credit analysts will focus on the applicant firm’s aggregate liquidly position and its
total debt position. The latter is measured by the total debt to total equity and total debt total
asset ratio while the first is measured by the ratio such as the current ratio and the quick ratio.
 8

Credit analysts emphasis these ratios because the seller wishes to known the likelihood of from
the applicants, how long it will take to receive the payment, and what is likely to happen if the
applicant defaults. A ration that measures aggregate liquidity assess the relative amount of
current asset and current debt and thus the funds received and paid as part of the applicant’s
working capital cycle. Problems within the working capital cycle are a major cause of default.

Collateral:-the amount of assets that available for use in securing the credit is called collateral.
Generally, MFI lend to low income clients who often have very few assets,
consequently ,traditional collateral such as property, land , machinery, and other capital assets is
often not available. Various innovative means of reducing the risk of loan loss have been
developed, including collateral substitutes and alternative collateral. The larger the amount of
available assets, the greater will be the chance that a creditor will recover its funds if the
applicant defaults. If the applicants experience financial difficulty, it may be forced to liquidate.
In such a situation, the recoveries to creditors will depend on the recovery is on assets sold, the
amount of debt owned by firm and the extent to which these debts are secured.

When firms are liquidated, the recoveries on assets are security for debt will go to the holds of
that secured debt. That is, the secured creditors get paid first from the realization of selling the
assets that have been granted to them as security. Therefore, when applicant has financed by
using secured borrowing and just in case, it defaults on paying its accounts, recoveries on
defaulted account will be significantly lower for creditors.

From conversation with the applicants; are view of the applicant’s balance sheet asset value
appraisal and any legal claims filed against the applicants’ asset can be used to evaluate its
collateral.

Alternative form of collateral;

There are at least three commonly used alternative forms of collateral.

 9

Compulsory saving; many MFI required client to hold a balance in saving for first or
subsequent loans they are not generally available for withdrawal while a loan is outstanding . it
have a positive impact on clients by smoothing out there consumption patterns and providing
funds for emergencies provided the saving are available for withdrawal by the borrower.

Asset pledged at less than the value of the loan;

Sometimes, regardless of the actual market value of asset owned by the borrower, the act of
pledging assets and the consequent realization that they can be lost cause the client to repay the
loan. It is important that the MFI formally seize the asset that have been pledged if the client
does not repay the loan. This sends a message to other borrowers that the MFI is serious about
loan payment.

Personal guarantees; while micro borrowers themselves do not often have the ability to
guarantee their loans they are sometimes able to enlist friends or family members to provide
personal guarantees. This means that in the event of the inability of the borrower to repay, the
person who has provided a personal guarantee is responsible for repaying the loan

Condition:- it includes current economic and business climate as well any unique
circumstances affecting either party to the credit transition . When firm has excess inventory of
the item the applicant wishes to purchase on credit, the firm may willing to sell on more
favorable terms or less credit worthy applicants. Analysis of general economic and business
conditions as well as special circumstances. That may affect the applicant or firm is performed
to assess conditions.

The credit analyst typically gives more attention to the first two characters and capacity
because they represent the most basic requirements for extending credit to an applicant.
Consideration of the last three is capital , collateral and condition is important in structuring the
credit arrangement and making the final credit decisions, which is affected by the credit
analyst’s experience and judgment.
 10

2.4 Who wants credit and why?

Business organization seeks credit for long term fixed investment capital purpose or for short
term, working or commercial capital purposes. Neither investment nor commercial credit would
be sought and granted unless the borrowers and lenders believed it productive credit that it
would be repaid and would have yield a profit to all parties.

2.5 Credit maturity

Micro financial institution grant term loans which can be defined as a loan granted for a specific
period of time and with a period repayments, or in lump-sum at maturity. There are three types
of loans in this category that their own eligibility and processing procedures these are:

 Short – term credit- a term which runs usually for less than one year

 Medium term loan /intermediate credit) is granted ordinarily for from one to five years and

 Long – term loan / credit- is a term loan, usually projects finance, granted for duration of
time exceeding five years.

2.6 Credit risk

Credit risk arises because some MFI borrowers may not be able to pay MFI their loan. More
ever, many of these along are made to borrowers risk difficult to assess and whose performance
is difficult to monitor. That is, they are loan characterized by the symmetric information,
problem of adverse selection and moral hazards. Success in making these loans depends on a
MFIs ability to produce information about these barrowers and structure their loans
appropriately, in particularly; the riskier loan should be charged a high interest rate face higher
collateral requirement. (Pandy, 2005)

2.7 credit management

MFIs are some of financial intermediaries. Thus, deposit mobilization and credit dispensation
are the two most important functions of MFIs. In a way these MFI are the trustees of the saving
and idle funds of the society. How efficiently the year able to discharge this responsibility
 11
depends largely up on the quality of their credit portfolios. The field credit management is more
challenging as it offers relatively scope to MFIs for judgment and discretion in selection their
loan portfolios.

Credit management function includes loan and advances. It involves large number of activities
ranging from credit investigation to contact with borrowers, appraisal, reviews, follow up
documentation, inspection, nursing recovery and write offs. These activities require decision
making skill, which can partly be developed though experience but partly it has to be learned
externally. This is particularly true in the areas of pre sanction appraisal and post sanction
follow up.

The credit policies of MFIs are conditioned to a great extent, by the national policies with in the
national policy frame- work, every financial service provider has to apply his own judgment for
arriving at a credit decision, keeping of course, his financial institution’s credit policy also in
mind . A credit decision involves consideration of at least three factors need of credit, risk
involved, and end use of credit. For evaluating these factors mere subjective judgment may prove
in adequate. The judgment, thus, needs to be supplemented by some information and data
pertaining to environment in general and the borrowers financial position in particular, financial
statement are by for most important source of information about the borrowers. Hence, bankers
need financial statement of the borrower for understanding the decision situation making in the
area of credit management has so many linkages.

2.8 loan and advances

1) Number of problems faced by borrower also are in regard to deposits, remittances,
collections, etc and have already been with basically, the problems peculiar for borrowers
arise due to difficulties in attitudinal adjustment of MFI staff to the new client and new
environments and inadequate job knowledge coupled with inexperience. It will obviously
take some time to overcome these problems in their entirety. The recommendations that
follow would never the less bring about a measure of improvement. Each MFI should
immediately undertake a sample study of the information and data sought for examination of
small loan proposals from clients the priority sectors for ascertaining whether the demands
12
 made by the bank are excessive and / or unrealistic, with a view to initiating corrective
action.

The task of simplification and consolidation of documents and bringing them out in regional
languages for loans in the priority sectors, especially for smaller units and agriculturalist, should
be taken up on an urgent basis. Loan document should be so designed as to take care of, as far as
possible, obtain entire set of fresh documents on each accession. MFIs must enjoin on their
operation staff to call for information data etc, for examination of loan application , as for as
possible, in only one or two installments, in case of small loans to agriculturalists, small
industrialists, entrepreneurs and small – businessmen . In consider loan

Applications for small amount in priority sectors, especially from small agriculturalists, artisans,
etc. loan officer should be encouraged to adopt flexible approach, sophisticated appraisal
techniques, useful in industrial landings, are out of place in considering the mall requirements of
small man. Here, what is important is an overall appraisal backed by a good knowledge of local
market prices, applicant and his back ground and familiarity with the nature of applicant. Loan
officers should be able to comprehend the total situation and determine whether:-

 Applicant seems honest,

 Applicant’s proposal seems reasonable
 Information given by applicant makes sense,
 Applicant can accomplish the purpose of the loan
 how necessary knows how and/or experience

The record of loan applications will be perused by visiting official from controlling office and
cases of undue delay, and rejections should be studied in depth on around on sample basis to set
right distortions in implementation of policies of bank. These visits and suits should also be used
for educating and counseling operating staff on the spot inspection official should also scrutinize
this record and comment upon it. (Pandy, 2005)

13
2.8.1 Purpose of the advances
While in the practical MFI environment, policy will from time to time, affect the MFI’s attitude
to certain types of lending, from an examination view point this can be disregarded. However,
the risk involved in advance is obviously influenced by the purpose for which it is required, and
the banker must be satisfied that the venture will succeed. (Palfreman, 1998). This is a particular
problem in the field of new ventures with in adequate capital. The introduction of equity
participation schemes and government backed grantee schemes has necessitated a new approach
to this of proposition and the approval of facilities that on normal banking principles would not
have been granted. It is important to ensure that an advance is not utilized for a purpose different
to that stated.

2.8.2 Amount the advance

There is a tendency for customer to ask the amount they think the institution will lend rather
than the figure they consider realistically needed to see project through. Therefore, it is essential
for the banker to ensure that the amount required is adequate for all eventualities.

2.8.3 Period of the advance

Historically bakers have been regarded as short- term lenders, but in recent year there has been a
much more flexible attitude towards medium term loans for a business purpose, for the smaller
term loan , the better merely sates that alone continues to be available for the period agreed
provided monthly repayment of interest and capital armed. (Pandy, 2005).

2.9 Interest rates

We have already mentioned that financial institutions pay interest on deposits and changes
interest on loans. Before we more on to look at how these activities express themselves on the
institutions balance sheets, we should ask ourselves what we understand by the term ‘’interest’’.
The simplest definition of interest is that it is payment made for the use of someone else’s
money.

14
When we speak of a rate of interest, we should be aware that there are a multitude of different
rates in operation at any one time. The particular rate of interest charged by a lender of paid to a
depositor depends on a number of interest charged by a lender of paid to a depositor depends on
a number of interrelated factors, the principal of which are the risk element and the factor. The
liquidity of a loan can be defined in one of two ways; the loan can be granted for asset period of
time, or it can be come repayable only after the expiry of an agreed period of notice.

How can an MFI set a sustainable rate on its loan?

MFI can determine the rate necessary to charge on loans based on their cost structure. The
following is one method of approximating the effective interest rate that an MFI will need to
charge on its loan to cover all of its costs and thus be sustainable(adapted from Rosenberg 1996).

Note that this method assumes a mature MFI with relatively stable costs, that is, start up costs
have already been amortized and the MFI is operating at full capacity. It is understood that an
MFI should not expected to break even at every point along its average cost curve. A certain
scale of operations is required to break even and hence to make this method applicable.

The annualized effective yield(R) charged on loan is a function of five elements, each
expressed as a percentage of average outstanding loan portfolio(LP); administrative
expenses(AE), the cost of funds (CF), loan losses(LL), the desired capitalization rate (K), and
investment income(II).

R=AE+CF+LL+K -TI
1-U

Including as

administrative expense (AE) are all annual recurrent costs except the cost of funds and loan
depreciation. Also included are the value of any donated commodities or services, such as
training or technical assistance that the microfinance organization will have to pay for in the
future as it grows independent of donor subsidies.

15
It range between 10 and 25 % of their average loan portfolio.

The loan loss rate(LL); represents annual loss due to defaulted loans. Past loan loss experience
is an important indicator of this rate. The loan loss rate may be considerable lower than the
delinquency rate, microfinance organization with loan loss rates greater than 5% tend not to be
viable.

The cost of funds (CF); rate takes in to account the actual cost of funds of the organization when
it funds its portfolio with saving and commercial debt. When an MFI also benefits from
concessional funding. Prior to determining the cost of funds rate, an estimation of the financial
asset(excluding fixed asset) and the proportion of debt and equity to fund these asset needs to be
determined, based on future funding policies. Ones this is done; two methods are suggested to
determine the cost of funds;

The estimation method; multiple the financial asset by the higher of the rate that local
banks charge medium quality commercial borrowers or the inflation rate projected for the
planning period.

The weighted average cost of capital method; based on the source used to fund the financial
asset, including loans to the organization, deposits if licensed to collect, and equity. This method
estimates the absolute amount of the annual cost of financing.

The capitalization rate(K); represents the net real profit that the organization would like to
achieve, expressed as a percentage of the average loan portfolio. Accumulating profit is
important because the amount of outside funding an MFI can safely borrow is a function of the
amount of its equity.

The investment income(II); is the income expected to be generated by the organizations

financial asset excluding the loan portfolio. Some of these, such as cash, checking deposits, and
legal reserves, will yield little /or no interest.

Calculate an effective interest rate using the internal rate of return method

To demonstrate the internal rate of return method of calculating effectives rates, the rate
calculation for a sample loan with six alternatives is presented(adapted from Rosenberg 1996).

16
The effective rate is calculated first for a “base case” (interest calculated on the declining
balance; no fees or compulsory saving). Then the effective rate is calculated to illustrate the
effect of different loan variables including ;

 Flat interest calculation

 Up front interest payment
 Loan(or service) fee
 Change in payment frequency
 Compulsory saving with interest
 Contributions to group funds (no interest).
Calculating the internal rate of return for each alternative involves three steps;
determining the actual cash flows, entering the cash flows in to the calculator to
determine the effective rate for the period, and multiplying or compounding the
internal rate of return by the number of periods to determine the annual rate.

Alternative1; Flat interest

Same as base case, except that interest in calculated on the entire loan amount(flat basis)
rather than on the declining balance and is prorated over the four monthly payment.
Alternative2; up-front interest payment
Same as base case (interest calculated on declining balances) but all interest is charged at the
beginning of the loan.
Alternative3; loan or service fee
Same as base case except that a 3 percent loan fee is charged up front.
Alternative4;weekly payments
Same as base case, except that four months worth of payments are paid in 16 weekly
installments.
Alternative5;Compulsorysaving with interest
Same as the base case, except that as a condition of the loan the client is required to make a
saving deposits of 50 along with each months payment. The saving account yields of 1 percent
per month , uncompounded, is available to the client for withdrawal at any time after the end
of the loan.

17
 (Alternative5 and 6 assume that the MFI receives and holds the compulsory saving and group
contributions. In such a case, the yield to the organization and the cost to the client are the
same.
If compulsory saving are held by someone other than the MFI, such as a bank , then the
amounts deposited should not inter in to the computation of yield to the microfinance
organization but should be included in calculating the cost to the borrower.)

Alternative6; Group fund contribution

Same as the base case except that as a condition of the loan the client is required to make a
contribution to a group funds of 50 along with each months payment. No interest is paid on the
group fund, although it is available to the client for withdrawals at any time after the end of the
loan.
Calculate the effective rate with varying cash flows
It is also possible to calculate the effective rate by using the internal rate of return method to
take into account cash flows that vary during the loan term. This is because the internal rate of
return calculation can consider each cash flow rather than a constant stream. This would be
useful for loans that have a grace period at some point during the loan term or if a lump sum
payment is made at the end of the loan return.
2. Empirical Literature Review
Anchalem Ayalew,Foziya jabir and Lidya Abiyu were worked a researcher paper in 2013 on
the title of assessment of cash management in micro finance institution in mekele.
The object of the paper was to asses the short term and long term lending police and
procedures to identify the problem that the MFI fails during managing the lending procedure
and client benefit. Based on the objectives of the researcher to conclude the MFI had no
problem in fulfillment the minimum requirement and the cash asset had been increasing over
year.
Biruk Abebe,Tewodros Girma,Yirga melsachew,Kidist tsegaye and Ephrem Ermias were worked
a research paper in 2007 on the title of effectiveness of micro finance institution.
The objective of the paper was to identify strength and weakness of Nisr MFI lending
strategies and cash management.

18
 Conclude that paper line MFI prepared credit management for improving the efficient and
effective utilization of cash and had well development planning and lending management
department which prepare the overall plans and loan management.
Afefayne wudajo and Yohhanes Fiseha were worked a research paper in 2009 in group base
lending in MFI.
The objective of these paper was asset the loan disbursement and monitoring system of the
MFI discover the risk detection practices of the group lending evaluate the control activity of
the Institution To conclude the researcher were only maintain the explain the weakness side of
the MFI.
Chapter 3
3.Research Methodology
3.1 Research Area
The study had been conducted at country level i.e. Federal democratic Republic of Ethiopia
where the basic attention given to Addis Ababa .The country is located in Eastern Africa
particularly sub-Saharan Africa and a country with a total population of over 90 million which
makes it populous among African countries. It is a Federal Democratic Republic, including ten
regional states: Afar, Benishangul-Gumuz, Amhara, Oromia, Tigray, Somali, SouthernNations-
Nationalities Peoples Region (SNNPR), Gambella, Harari, and Sidama with two administrative
states: Addis Ababa city administration and DireDawa City Council.
3.2 Methodological approach
The researcher had used primary and secondary data for analysis. In addition, researcher used
quantitative and qualitative research approach.In addition since quantitative research approach
is much more reliable and free from biasness, researcher has chosen for this study. Also, to be
objective, to reduces and restructure a complex problem to a limited number of variable.

3.3 Methods of data collection

3.3.1 Quantitative methods
The survey consisted of 5 multiple-choice questions. The aim was to conduct the survey with 19
customers of Awach Microfinance on the library in The Bole secondary high school from 3-8
July 2021 between 11:00 and 15:00. A customer was defined as a person who had taken a loan
before the day of questioning. Participants were given 5 minutes to fill in the survey
anonymously, and 16 customers responded.
19
3.3.2 Qualitative methods
In order to gain a better insight into the possibilities for improvement of the loan range, semi-
structured interviews were conducted with 3 returning customers from the main target group
of Awach microfinance. A returning customer was defined as someone who usually took loans
from awach microfinance. The surveys were used to select participants who belonged to the
target group (20-45 years old). Interviews were conducted in a small office next to the cash
register, and lasted approximately 10 minutes each. Answers were recorded by note-taking.

3.4 methods of analysis

3.4.1 Quantitative methods
Before analysis the gathered data was prepared. The dataset was checked for missing data and
outliers. For this the “outlier labeling rule” was used. All values outside the calculated range
were considered outliers (Hoaglin & Iglewicz, 1987). The data was then analyzed using
statistical methods (mean, media, mode).

3.4.2 Qualitative methods

Thematic analysis was conducted. This involved coding all the data before identifying and
reviewing six key themes. Each theme was examined to gain an understanding of participants’
perceptions and motivations.

3.5 Sampling methods

For quantities approach the research used simple random sampling methods. The research had
a population of 40 individuals who had taken loan from awach microfinance each individual was
assigned a number and was selected randomly.
Non probability sampling methods was taken for qualitative method of data gathering the type
of sampling taken was a voluntary response sampling, Instead of the researcher choosing
participants and directly contacting them, people volunteer themselves

20
3.6 Source of Data
The sources include Awach MFI(savings and annual reports). This secondary data and personal
observations had been used by the researcher to gain the idea and information to develop the
literature review and complete this thesis.
3.7 Work schedule

S.No Activity Month

June Aug
July

1. Bibliographic Searches √

2. Photocopy info from non bibliographic sources √

3 Problem defining & literature finding, Title √

selection

4 Submission of thesis proposal √

5 Fine tune research question and methodology √

6 Prepare research tools in detail √

7 Make contacts for interviews/questionnaires √

8 Data collection √

9 Data analysis √

10 Writing up of paper √

11 Revision, editing and submission √

12 Submission of research paper √

13 Paper defense √

21
3.8 Logistics

Budget heading Unit Quantity Cost Total

Cost(Birr)

Per diem for Researcher Person 03 100 300

Per diem Data Collector Person 02 150 300

Stationary and Equipment

Photo copy paper Ream 24 3 72

Pen Pcs. 10 10 100

Flash disk Pcs. 1 250 250

Miscellaneous Birr 320 320

Sub-total 1342

Contingency 10% 134.20

GRAND TOTAL 1476.2

22
 CHAPTER FOUR
Data analysis and interpretation
This part deals with the major findings of the study. For data analysis and interpretation
purpose the relevant information was gathered from questionnaires distributed to the
customers of the organization and face to face interview with the reaming customers and also
the year budget report of 2009 from the organization
Finally, the collected data organizes and arranged in appropriate manner that will be readable
and understandable to the reader by using different analysis and interpretation techniques like
percentage and table.
Table 4.1 Demographic characteristic of respondent and their educational
Qualification.

Sex Educational level

Degree Diploma 12th Complete Total

No % No % No % No %

Male 7 43.75% 2 12.5% 1 6.25% 9 62.5%

Female 3 18.75% 2 12.5% 1 6.25% 5 37.5%

Total 10 62.5% 4 25% 2 12.5% 16 100%

(Source: Data collected through questionnaires)

From the above table, the respondent answer indicates that 4(25%) of the respondent are
diploma holders, 10(62.5%) are degree holders and also 2 (12.5%) of the respondent are 12 th
complete. In addition to this the respondent response indicates that most of the customers are
males that is 9(62.5%) of the total population and the rest 5(37.5%) of the respondent are
female.

Questioners
1)Based on the lending strategy that awach you took how much long did you have to save to
get a loan for your business?
A)6 month B)8 month C)1 year D) 2year
 23
Table 4.2 Question 1 responses
Types of choice Number of responders Percentage %

A 9 56.25%

B 3 18.75%

C 2 12.5%

D 2 12.5%

(Source data collected through questionnaire)

From the above table 16 respondents 9(56.25%) of the respondents chose A meaning they
saved only 6 month which is the minimum requirement to get a loan this could also mean that
if given the choice they would take less time to get those loans. 3(18.75%) of the respondents
chose to give the answer B which is 8 month means they had more than 2 month than of the
required minim amount to get a loan in which the reaming responders a year and above they
are getting the advantage of receiving interest.

2) A member could take up to 400,000 (four hundred thousand) Ethiopian birr loan for social
services, business, health, and education. Based on this what would the customers maximum
amount would like to be for those services?
A)400000 B)600000 C)800000 D)1000000
Table 4.3 Question 2 responses
Types of choice Number of responders Percentage %

A 1 6.25%

B 3 18.75%

C 8 50%

D 4 25%

(Source data collected through questionnaire)

 24
From the above question we can understand that A member could take up to 400,000 (four
hundred thousand) Ethiopian birr loan for social services, business, health, and education
according to the responders the data we gathered have shown us that 8(50%) was directed to
the answer C meaning people would like to have more than 400000 that is twice as Awach
microfinance has stated in its policy of lending. Answer A was selected only by one customer
giving it low count as how the Microfinance is operating.

3) According to Awach MFI the loan interest rate is 13.5% per year for social or business loans,
14.5 % per year for the vehicle loan, and 15.5 % per year for the house loan. How much
percentage decrease would satisfy the customer?
A)1% B)1.5% C)2% D2.5)% E) already satisfied

Table 4.4 Question 3 responses

Types of choice Number of responders Percentage %

A 3 18.75%

B 3 18.75%

C 7 43.75%

D 2 12.5%

E 1 6.25%

(Source data collected through questionnaire)

From the above table it can be understood that almost all of the responders chose to change
the interest rate imposed upon lending to customers 7 out of the 16 responders chose the
answer see meaning they want see a reduction by up to 2% on the lending strategy 3(18.75%)
chose the answer A which is a reduction by 1% and 3(18.75%) chose the answer B which was a
1.5 reduction rate in the interest offered. Only 6.25% of the responders actually liked how the
interest rate was offered
4)How strong is the follow up and control toward you the customers?
A) Strong B) medium C)weak D)very weak
 25
Table 4.5 Question 4 responses
Types of choice Number of responders Percentage %

A 4 25%

B 8 50%

C 4 25%

D 0 0%

(Source data collected through questionnaire)

From the data collected above it can be seen that 8(50%) of the responders belive that Awach
microfinance has a medium follow-up and control after the lend is given out to its customers
4(25%) on the other hand suggests that Awach microfinance has a good and strong follow-up
and control.Although 25% argue that its non of them had chosen the answer D which was
awach MIF is very weak in its follow up and control.
5) By lending from Awach MFI how much satisfaction did the you customer gain from there
lending stratiges or policies ?
A) very satisfied B)intermediate satisfaction C) needs some changes
Table 4.6 Question 5 responses
Types of choice Number of responders Percentage %

A 6 37.5%

B 7 43.75%

C 3 18.75%

Responders have put their level of satisfaction from very satisfied, intermediate satisfaction, or
to the last to argue that in needs some changes 6(37.5%) of the responders was very satisfied
by the services they were offered 7(43.75%) on the other hand had an intermediate satisfaction
3(18.75%) were not happy and suggested that Awach microfinance needs to change some of its
lending strategies.
Qualitative
1.What was the kind of loan you took from awach microfinance
2.how much loan were you able to acquire from awach microfinance
 25
3.What do you think about the interest rate imposed on the loan
4. were you satisfied with the whole lending process that took place

Customer 1
1Business loan
2.300000
3 “personally the interest rate was a bit higher for me as I had to pay montly fee + the interest
but since it was an argument I had signed I had to hold up the side of the deal’ .
4. it was an intermediate satisfaction I had my businesss up and running so I have to thank that
for awach microfinance .
The type of loan chosen from customer 1 was Business loan the maximum amount you can
barrow for business is 400,000 but customer 1 chose to 300,000 worth of loan when asked
about the interest rate imposed on the loan customer was little conservative about what he
said “personally the interest rate was a bit higher for me as I had to pay montly fee + the
interest but since it was an argument I had signed I had to hold up the side of the deal’ thus this
answer reflected on the last answer which the customer told us that he gain Intermediate
satisfaction.
Customer 2
1. Loan for purchase of vehicle
2. 600000
3. “Interest rate was somehow as I expected I understand that most of the income gained
is from the interest rate on the loan so I understand’
4. “yes I was satisfied as I have gained access to the money I wanted and paid quickly so I
am garneted to say it was a good experience”
As stated above the type of loan customer 2 acquired was a loan for the purchase of vechile
that loan the amount you can acquire is upto 600,000 the customer took this money fully when
asked about the interest loan offered he stated saying “Interest rate was somehow as I
expected I understand that most of the income gained is from the interest rate on the loan so I
understand’ it can be understood that this customer appreciated the lending strategy Awach
microfinance had in place as a result the customer was satisfied about the services he was
offered.
 26
Customer 3
1. Loan for Health
2. 400000
3. “since I had to borrow for medical purposes I wish they had a lower interest rate as
its hard for people like me to pay back easily if Awach could lower those interest
rate it would be better”
4. “I am somehow not that much satisfied with the service I know I had no choice but
the interest rate actually doubled on me when I didn’t pay one month fee so I was
very discouraged about that”

Customer 3 had some how strong reviews abou Awach MFI she had took the loan for health
purposes and had taken the maximum amount that was 400,000. The opnion about the interest
rate was as follows “since I had to borrow for medical purposes I wish they had a lower interest
rate as its hard for people like me to pay back easily if Awach could lower those interest rate it
would be better” this answer also influenced about how satisfied she was abou the services
given which was a poor review and suggested that the interest rate doiubling would draw there
customers back and should change there lending stratgies

28
 Chapter 5
SUMMERY OF FINDING, CONCLUSION AND RECOMMENDATION
5.1 Introduction
While microfinance institutions are a great way to help many people to elevate their problems
specially through lending process we have seen some points from the state of the problem how
customers can be affected to mention some of them, is the Interest rate imposed on the loan
given out to customers as its higher than most expect of course the interest rate is the main
income for most MFI also in our case in Awach MFI, another problem we included was the
colletral,pay back period and of course weak follow up and control if there is a weak follow up
and control the customers might get distracted that in the loan they took might double in
Interest which will make it even harder to pay back.
5.2 Research Questions Review
The series of five of questions presented in chapter one were structured so that it may reflect
the scope and the statement of the project title. In other words these five questions help the
authors to verify how well customer segments are understood and individually serviced by
Awach Microfinance lending strategies implemented.
5.2.1 What are the requirements/criteria’s heeded to be fulfilled by the borrowers to get a
loan?
 he member should save regularly for at least six consecutive months that amounts one
fourth (1/4) of the requested/needed loan amount.
 For a house or a vehicle loan, a member has to save at least a year.
 The pre-loan saving for a house loan is 30% and 40% for a vehicle.
 Should bring income statement/ letter from her/his organization
 Business operators should bring a renewed trade license and cash flow statement that
indicates their monthly cash flow.
 Should bring collaterals for the loan
 Should bring one member from the cooperative as a guarantee.
 Should be willing to pay 1% service charge and 1% insurance

29
5.2.2What are the factors affecting the effective lending strategies for Awach MFI?
The above question intends to determine a qualitative and quantitative value delivery that can
be provided by Awach MFI for their customers in such a way that it can facilitate their loyalty
and satisfaction.
-Level of performance of Awach MFI if its operating at the standard level of performance if
Awach is providing trainings that targeting MFI there will be a high performance rate will be a
great service.
-Inflation changes in other economic factors affect the rate at which Awach MFI can afford its
loan it might increase in interest rate or lower the amount that it uses to offer
-Competition with other microfinance institution highly affect the lending strategies formerly
implemented by Awach MFI as it’s in a competition the lending strategies will be flexible
-Source of business capital are among the major factor determine the lending strategies of a
microfinance institution.
5.2.3 How can Awach MFI increase its profitability?
profitability is determined by how much money is left over after a product is produced and all
expenses have been paid in this context from the studies we have seen since Awach
microfinance is not a manufacturing company it’s a service providing company so its focus will
be its customers .
With increased competition in the microfinance industry in most markets, customer satisfaction
and retention are important issues for most microfinance institutions (MFIs). We rely on survey
data from customers of Awach MFI in to examine the potential determinants of customer
satisfaction in the microfinance sector. We find customer satisfaction to be significantly related
to customers' experiences and motivations such as the primary reason for associating with MFI,
and the size of credit they seek. We further find customers' demographic factors such as
educational attainment and household income levels to be related to customer satisfaction in
the microfinance sector. If those things align and Awach Microfinance for example decrease its
interest rate, strength there follow up and control, expand there marketing Awach
Microfinance will increase its productivity and profitability.
5.2.4 -How can customer activity and saving affect Awach MFI?
Awach MFI have been successfully serving some of the poor and poorest people around the
world, primarily with credit products. Generally however, MFI grapple to successfully add
savings services to their portfolio of financial products. Whether offering savings as a way to
provide additional valued financial services to clients or to have a reliable source of funding, or
both, Awach uses together people and technology and build the capacity and infrastructure to
grow 30
In contrast the world’s most vulnerable people are often in no position to take on the risks of
entrepreneurship. They point to evidence showing that stable jobs in large industries, not
volatile small businesses, lift people out of indigence (“Microfinance Misses Its Mark” in the
spring 2007 issue of the Stanford Social Innovation Review). They cite research showing that
microfinance clients have been known to scrimp on food, sell their furniture, borrow from loan
sharks, and take second jobs to pay off their loans that husbands, sons, and fathers-in-law often
take control of women’s loans and that, overall, microfinance fails to find its way to the world’s
poorest people. If these activity continues saving in Awach microfinance decreases means less
clients means its Awach is not giving out loans since the main income of Awach is the interest
rate gathered from the loans.
5.2.5 How much customers are satisfied with Awach MFI lending strategies and its
effectiveness?
From the chapter 4 we have gathered we have asked all customers of Awach Microfinance
what there level of satisfaction was.
Responders have put their level of satisfaction from very satisfied, intermediate satisfaction, or
to the last to argue that in needs some changes 6(37.5%) of the responders was very satisfied
by the services they were offered 7(43.75%) on the other hand had an intermediate satisfaction
3(18.75%) were not happy and suggested that Awach microfinance needs to change some of its
lending strategies. From the qualitative research we have gathered the responders gave 1 vote
to each of the 3 choices.
5.3 Recommendations and suggestions
The present research work was focused on the lending strategies of Awach microfinance
institution to help then gain customer loyalty and yield a higher profit through there lending
strategies. A framework was developed in collecting data, analyzing, and interpretation towards
the answers to the research questions.
From the all above, the researchers will recommend Awach microfinance should set a strategy,
simplify customer segmentation, use technology to support the business objectives, lower the
interest rate that they impose on the loans they offer, cut back on the time period the
customers have to save in order for them to be eligible to get a loan.

31
References
 Armendáriz de Aghion, Beatriz and Jonathan Morduch. (2005). The Economics of
Microfinance. Cambridge: MIT Press.
 McIntosh, Craig and Bruce Wydick. (2005). “Competition and microfinance.” Journal of
Development Economics 78(2), 271-298.

 McIntosh, Craig, Alain de Janvry, and Elisabeth Sadoulet. (2005). “How Rising
Competition among Microfinance Institutions Affects Incumbent Lenders.” Economic
Journal 115(506), 987-1004.

 Bali Swain, R., 2004. Is Microfinance a Good Poverty Alleviation Strategy - Evidence from
Impact Assessment, Making Markets Work for the Poor Series, Stockholm, Sida.

 ADAMS, J. & RAYMOND, F. 2008. Did Yunus Deserve the Nobel Peace Prize:
icrofinance or Macrofarce? Journal of Economic Issues

 Christen, R (1990) Financial Management of Micro-Credit Programs: A Guidebook for

NGOs, ACCION Publication

 Yaqub, S (1996) 'Macroeconomic Conditions for Successful Microfinance for Poor

People'

 Webster, L and Fidler, P (1995) The lnformal Sector and Micro-Finance Institutions in
Western Africa, Private Sector Development Department, World Bank.
 SEEP (1995) Financial Ratio Analysis of Micro-Finance institutions, SEEP Network,
CALMEADOW.

32
 Faculty of business
Department of Accounting and finance

Questioners

Dear respondent:- This questionnaire is designed to help in examining and assessing the lending
strategies and effectiveness of Awach MFI. So you are kindly requested to give the right
response you think, since it contribute a lot for the success available for the study.

33
 NB.:- There is no need of writing your name
Make a thick mark ()in box which you think an appropriate response

I. Personal profile
I.1 Sex Male 
Female 
I.2 Education level
12 complete 
Diploma 
Degree 
Others 
II. General question

1)Based on the lending strategy that awach you took how much long did you have to save to
get a loan for your business?
A)6 month B)8 month C)1 year D) 2year
2) A member could take up to 400,000 (four hundred thousand) Ethiopian birr loan for social
services, business, health, and education. Based on this what would the customers maximum
amount would like to be for those services?
A)400000 B)600000 C)800000 D)1000000
3) According to Awach MFI the loan interest rate is 13.5% per year for social or business loans,
14.5 % per year for the vehicle loan, and 15.5 % per year for the house loan. How much
percentage decrease would satisfy the customer?
A)1% B)1.5% C)2% D2.5)% E) already satisfied
4)How strong is the follow up and control toward you the customers?
A) Strong B) medium C)weak D)very weak
5) By lending from Awach MFI how much satisfaction did the you customer gain from there
lending stratiges or policies ?
 A) very satisfied B)intermediate satisfaction C) needs some changes 34

Faculty of business
Department of Accounting and finance

Questioners

Dear respondent:- This questionnaire is designed to help in examining and assessing the lending
strategies and effectiveness of Awach MFI. So you are kindly requested to give the right
response you think, since it contribute a lot for the success available for the study.
 35

NB.:- There is no need of writing your name

Make a thick mark ()in box which you think an appropriate response

III. Personal profile

III.1 Sex Male 
Female 
III.2 Education level
12 complete 
Diploma 
Degree 
Others 
IV. General question

1.What was the kind of loan you took from Awach microfinance ?
2.how much loan were you able to acquire from Awach microfinance?
3.What do you think about the interest rate imposed on the loan?
4. were you satisfied with the whole lending process that took place?

36