Calmeadow Peer Lending Model

Many of the first time peer lending businesses are unregistered. The idea is to start small until you develop your business. Because the process of learning and legitimizing develops over time as the business grows, the size of investment grows proportionately over time. The lending process is highly literacy dependent as it is often confusing for those with limited literacy skills and people who speak English as their second language.

Each person within the group has their own business. For a member of the group to borrow money, all members of the group must be in agreement, because their role is to back up the borrower and pay off the loan in the event that a payment is missed, or the business fails.

Before a member of the group can be approved for a loan, Work Alive or a Loan Review Committee will hold a meeting with all of the group's members. In the meeting, questions are asked of the group regarding the nature and viability of the other members' businesses. The questions are open for any group member to answer with the exception of the member whose business is being questioned. If the group cannot answer the questions, they are asked to go away and rediscuss the nature of their members' businesses again. This process ensures that each member believes in the strength of the others' businesses and encourages peer development.

The first loan is a maximum of $500.00. It is loaned with the knowledge that the business is undergoing a training and testing period. The payments are made monthly with a minimum 3 month and maximum 6 month repayment plan for the first loan. When these loans have been repaid, further loans are made in increasing amounts, with longer maximum repayment times. When the borrower is in the market for more than $5000 loans, the time is usually right to go to a traditional lender.


Hari Srinivas -
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