Tasks of the MFI
The MFI handles nearly the whole loan process - from the first contact with the client until full repayment of the credit. The bank handles the administration without any direct contact to the clients– based on the information provided by the MFI.
The loan process is organised in a fast and easy manner: The MFI analyses the loan application, takes a decision and if found positive sends the relevant contract data via the web-based platform to the GLS Bank. The bank then generates the loan contract, sends it to the MFI where it can be signed by the client. Afterwards the money is paid out directly to the client's personal account.
acquisition: the MFI collects loan requests from start- ups or small entrepreneurs. It develops tailor-made loan products for its respective target group (the products can focus on entrepreneurs with a migration background, on special financing needs or on special regions).
credit analysis: according to the MFI's loan process the analysis can be done on-site (on the premises of the client), it can be done through assessing the client's account statements to see whether the client can deal with money, it can be done in discussing the business plan or through checking the prefinanced contract.
data: the data relevant for the loan contract are provided by the MFI and transfered to the GLS Bank via a “secure” web-based internet platform – this platform is also used for the loan monitoring process.
signing of the loan contract: the loan contract is sent to the MFI, signed by the client and sent back to the bank. As soon as the bank receives the signed loan contract the money is disbursed.
collaterals: the MFI is responsible for the management of the collateral and can decide whether to take any or not.
monitoring: the MFI can monitor the monthly repayment electronically. As soon as arrears turn up the MFI can act fast and contact the client personally.
loan restructuring: the MFI decides on any changes in the repayment plan. The MFI informs the bank that makes the contract changes.
write-offs: the MFI informs the bank of delinquent loans that are perceived to be uncollectable via the web-based internet platform. The amount of loans written-off will be deducted from the yearly gratification.
Since the MFI takes the decision whether to grant a loan or not these institutions are liable for 20% first loss of their outstanding loan portfolio. In this regard, each MFI has to deposit or provide a guarantee over 20% of the outstanding loan portfolio as collateral at the GLS Bank.
