Loan origination, disbursement and repayment
Loan origination and disbursement happens through the standard channel of group lending. Care is taken that assessment of market and business risk acts as recommendation to group institutions and not as a directive. The group institutions have the prerogative of either accepting or rejecting the recommendations made by MVCs. The group institutions (block level or cluster level or village level or group level) receives a diagnostic report (in other words, a brief business plan in local dialect) that educates the group members about the business potential and the risks involved.
Only when the group institution approves, the funds are disbursed or lent. The features of loan – interest rate, nature of instrument, size of funding – are all sanctioned by the group institutions. The repayment also happens through normal channel of group institutions.