Our Micro-credit Client

I have to admit that my eyes glazed over when I first heard the I would be assigned to work on a micro-credit project. Then again, I did not know much about micro-credit or why it is so crucial in the developing world. Micro-credit is very small loans extended to impoverished borrowers who usually lack collateral, decent credit history and employment. It is intended to stimulate entrepreneurship, alleviate poverty, increase income levels, and aid the disadvantaged. The 2006 Nobel Peace Prize was awarded to a micro-credit bank and its founder in Bangladesh, and by 2009 there were an estimated 74 million micro-credit loans world-wide. However, while the aspirations of micro-credit are noble (pardon the pun), it has proven extremely difficult to implement successfully.


 At left, the ECRFC head office in King William's Town and below, team-mates in our project office (from left, Marco, Anna and Jason).

Our client, the Eastern Cape Rural Finance Corporation (ECRFC) is a government agency under the provincial Department of Agriculture. They have two objectives that constantly need to be balanced: aligning with the government intervention agenda and financial sustainability ... in other words they provide as many loans as they can but need more of it to be repaid.  Unfortunately, the loan default rate is unacceptably high, so the objective of our CSC project is to develop a loan repayment strategy. With just a few short weeks to tackle some monumental challenges, we are using a consulting methodology to provide the ECRFC Board and management with a set of recommendations that can realistically be achieved.