When a member cannot repay her loan

Two people go, and they go to her home, not to the meeting. One of them should be somebody she is close to. The treasurer should be one of them only if she is not the person the member is avoiding.

Go to find out what happened, not to collect. Ask, and then be quiet long enough for the answer. Women will say a business is slow when what has actually happened is that a husband took the stock money, or a child has been sick for three weeks, or somebody died and the whole trading capital went into the funeral.

Say clearly what you can and cannot do, and never promise something the group has not agreed. Then take the true story back to the group, with her knowing you are going to.

The first is a shock: illness, a funeral, a fire, a theft, a crop that failed. The money went somewhere real and there is nothing dishonest about it. This is what a social fund exists for and what rescheduling is for, and these members almost always repay eventually.

The second is that the business genuinely did not work. She bought stock nobody wanted, or a competitor opened, or she priced below her costs and did not notice for two months. Rescheduling alone will not fix this. She needs a different plan, or the group is lending her the money to fail twice.

The third is that the money never went into a business at all. It went to a household need, a relative, or somebody else's debt. This is the hardest conversation and the one groups avoid. Have it plainly and without shame, because the size of the next loan depends on knowing which of the three you are dealing with.

A rescheduling is a new agreement, not a vague extension. Write the outstanding amount, the new instalment, the new dates and the final date, and have the member and two officers sign or thumbprint it. Read it out at the next meeting so the whole group knows what was agreed and nobody hears a rumour instead.

Set instalments she can genuinely meet, even if that means many small ones over a longer time. A schedule she fails in the second week teaches the group that agreements do not matter, which is far more expensive than the loan.

Ask what changed, so the new schedule is not the old one with hope added. If her income now arrives after a harvest rather than weekly, the instalments should follow the harvest. Groups that match repayment to how a woman actually earns get repaid.

Most groups keep a small separate fund built from a fixed contribution, for burials, serious illness and disasters. It is the group's insurance and it is the reason a funeral does not have to become a defaulted loan.

Keep it strictly separate from the loan fund, with its own page in the book and its own written rules on what it covers and the maximum. A social fund that quietly becomes a way of clearing bad loans stops being available for the emergency it was created for.

If the group decides the fund should cover part of a member's shock, vote it and record it as a social fund payment, not as a repayment. Mixing the two makes the accounts impossible to read at share-out.

Sometimes the money is not coming back. A member dies, or moves away with no address, or has genuinely nothing. Carrying an unrecoverable amount on the books for two more cycles poisons every meeting and stops the group lending to anyone.

Write-off should be a decision of the whole group at a meeting, recorded with the date, the amount, the reason and the vote. Decide too whether the loss falls across all members in proportion to their savings, which is the usual and fairest way, or against the guarantors, which is what some constitutions say. Whichever it is, it should have been written down before it happened.

Then look honestly at what let it get that far, and change one rule. Groups that write off without changing anything write off again in the next cycle.

Do not go to her house and take a saucepan, a mattress, a goat or a bicycle. Whatever anybody says about it being allowed, a group that starts seizing property turns into something women leave, and the loss of ten members costs more than one loan.

Do not announce her debt at church, at the borehole or on the trading centre. Shame does not produce money. It produces a woman who stops coming, and a debt nobody can now negotiate because there is no relationship left to negotiate through.

Do not let officers pursue this alone or after dark, and do not involve outside people to apply pressure. If the group truly believes money was taken dishonestly rather than lost, that is a different matter and it should be discussed with the whole group and, where necessary, taken to the proper authorities rather than handled by three members on a Saturday.

An unpaid loan at share-out means less to divide, and members feel it in their own hands, which is when tempers rise. Explain the arithmetic before the money is counted out, not during. Show the loan page, show the write-off entry if there is one, and let people ask.

Decide before the new cycle starts whether the member may borrow again and on what terms. The usual answer is that she saves and does not borrow for a cycle, then starts again at a small amount. Expelling a woman who had a bad year is rarely the right answer and often loses the group its best future saver.

One or two failures in a cycle is normal for a group that is lending at all. A group with no failures is often a group lending far too little to be useful. Judge the rules by whether the money keeps circulating, not by whether nothing ever goes wrong.

The treasurer reads the loan page aloud at every meeting: who owes what, and who is due this week. It takes three minutes and it is the whole early warning system. A group that only totals up at share-out finds out about a problem when there is no time left to fix it.

The signs come before the missed payment. A woman who was at every meeting starts sending her savings with a neighbour. She stops speaking in the meeting. She pays exactly the interest and none of the principal, twice running. Her stall is shut on a market day.

Say something in the same week. Not a public accusation, just a quiet word after the meeting from someone she trusts. Most problems at that stage are still small enough to be solved with a different date rather than a different amount.

Nearly every unrepayable loan can be traced back to a rule that was never written or a first loan that was too big. Groups are most generous in the first months, when everyone likes each other and the box is full, and that is precisely when the discipline has to be set.

You cannot go back and set it for the loan that has already failed, but you can set it before the next one leaves the box. Write the loan rules into the group's constitution and read them aloud at the meeting before the next loan is issued, so nobody can later say they did not know. Then apply them to the chair and the treasurer exactly as to everybody else, which is the part groups fail at.