By Sally Bolton, KF11, Mexico
A strange thing happens when the time comes to take a photo of a Kiva borrower or group. Women who moments before were smiling and laughing suddenly put on their solemn photo face. My colleague Marta is great at coaxing a smile from even the most serious photo subjects. “Lend me a smile, please,” she says. “I’m going to make you a star! Next stop, Hollywood!” The women break into smiles, and with a quick click of the camera she captures the moment.
The women have another thing in common with Hollywood stars, aside from having their photo taken. They have extensive experience in signing their names. Over and over and over again. Only they’re not signing autographs for their adoring fans, they’re signing all of the documents required to disburse a loan.
During a loan disbursal yesterday I counted each woman sign their name 20 times. They had to sign the loan contract (in several places), the group constitution (which lays out the fines that group members must pay if they arrive late for meetings or are late in making repayments), the cheque and a photocopy of the cheque. They also signed a form guaranteeing the loan of one of the other group members, a core component of the community banking loan model. They had to sign a form nominating a group member and a relative who was allowed to receive their savings cheque at the end of the loan term if they are unable to attend the final loan repayment meeting. And they signed a number of other documents, which I can’t accurately describe. This group wasn’t receiving a Kiva loan, but if they had been they would have also had to sign the Kiva client waiver.
The entire process was even more work for Angelica, who had the dubious honour of being nominated as the group member with the neatest handwriting. Two members signed by thumbprint, and she had to write their names next to each of the prints and witness the print.
“This is even more work than my wedding, but with less cake,” one of the women joked. The civil wedding process in Mexico also requires countless signatures, but apparently not quite as many as a microloan disbursal. Finally, after all of the documents were signed by all 12 women, and after one frantic trip home by a member who forgot to bring her ID with her, the cheques were handed out.
The entire loan disbursal process takes around an hour and a half according to Lilia, the manager of CrediComún’s branch office in Toluca, just west of Mexico City. On a very busy day she may handle up to eight disbursals. Microloans equal maxi-workdays for field staff.
Surely there has to be a way to simplify the process. Fortunately CrediComún is always on the lookout for ways to deliver microcredit more efficiently. They are currently implementing a new contract which will be valid for up to four loan cycles. This will significantly cut down the time it takes to disburse loans for subsequent loan cycles, and also the administrative burden of producing a new contract for each cycle. It may also reduce the risk of RSI by cutting down the number of signatures required during the disbursal process. And that should give borrowers something to smile about.
The Guadalupe SJ Group receive their cheques on disbursal day