What if a borrower does not pay?

To the Founding Members:

This is to address the number one concern of the group which is “what if the borrower dodges and skips town?”

Just to put a bit of ease in your minds, this invitation was only extended to one residence. By one residence, this means you are all found in one workplace. You all know each other, you all work in the same building, and any one of you can easily verify the tenure and salary of each and every member. Plus all of you already have a proven credit history. The borrowers are also the members. These factors in and by itself is already a control measure to minimize the risk of a bad debt.

On top of this, there is also a process that will be followed to do our best to collect. First, the individual contribution and interest earnings will be deducted. Second, confirm if the individual has a co-maker or not. If there is a co-maker we collect from the co-maker, if not we go to the baranggay for assistance.  

For baranggay assistance:  Step 1. Blotter. Step 2.  File a complaint . Step 3 the baranggay will attempt to invite the individual to settle. Either we settle in the baranggay or the baranggay will endorse the complaint to small claims court. 

It is true lending is high risk, high yield. Either there is a gain or there is a loss. But the whole point why this group was created was simply to promote savings and to borrow money against our savings at a lower interest rate. 

This is a membership, a group venturing together in a lending business exclusively among ourselves. It is within our powers to minimize bad investments. You are free to file a complaint to disqualify a member and make your case to the committee. 

If you have your doubts, please follow your instinct.

Thank you,

M