- Country: Ghana
- Industry: Banking, Finance, Accounting, Insurance
- Stage: Initial growth (first revenues)
- Years in operations: 1, Employees: 13
- Investment size: $50,000 / min. $25,000
- ROI: 100% in 1 years
- Type of investment: Debt, Equity
Request for financial support for a microfinance Ltd. The support is for the disbursement of small loans to groups of women and other customers.
The company plans to extend its operations to the upper east and west regions of Ghana in the near future.
Institutional Information of SMF Ltd.
SMF is a micro-credit business entity, which provides small loans to its clientele at an interest rate. The company is registered under the business Registration Act 1963 (Act 179) by the Registrar General’s Department on the 12th of February, 2013 to formalize its operations.
SMF aims at providing access to credit to women and men who do not have access to the banks or consider the banks as too bureaucratic. SMF therefore aims at mobilizing funds from these category of clients whose daily sales goes unbanked, by providing them first of all with some microcredit payable at a competitive interest rate of ten percentages (10%) monthly.
In December, 2012, the company disbursed loans worth USD 5,000.00 (Five Thousand) to some of its clients.
The main aim of the company in its selection of the groups as its business partners is to ensure security of the loans granted them as the group itself serves as a check. The company has a ten (10) member field staff and a three member management team and two advisers. The company also, plans to provide an insurance cover to all staff with professional fidelity.
The financial support (loan) facility will greatly augment our capacity to expand our loan portfolios in selected communities in the Tamale district. Savannah microfinance ltd currently has five (5) active groups who are all into various commercial ventures. The size of each group is between twenty (20) and thirty (30), which is subdivided into tens (10s) for purposes of effective monitoring and evaluation. The groups are monitored by two (2) officers each from the company.
The company plans to disburse small loans to these identifiable groups at an interest rate of 10% monthly. The repayment period of the small loans to the groups ranges from 2-3 months. The company has in place tried and tested control measures for loan repayments. Our recovery is 100%.
SMF operates in a competitive environment where several microfinance institutions and conventional banks operate. The company has adapted competitive products and an attractive interest rate to suite our customers.
The unique nature of our services, coupled with our continuous presence with out customers has put the company abreast with circumstances in the industry.
Rationale for the deal
The company has identified certain untapped sectors of the commercial environment where business transactions go unexploited. It is the goal of the company to tapped in to the mass of the transactions that goes unbanked and thus, channel these resources to the company.
The company relies on interest from the disbursement of loans to customers and also, charges from the issuance of passbooks to cater for allowances and other operational activities of the company.
The microfinance industry in Ghana is a fast growing one. Having worked with a microfinance company and a credit union in the region, I am equipped with the requisite knowledge to propel Savannah microfinance to a formidable company in the region.
Use of financing
The company's main aim is to provide small loans to identifiable groups , particularly, women groups with an attractive interest rate of 10%, mutually beneficial to both parties.
Acquiring credit in Ghana is a challenging endeavour. The company's aim is to re invest proceeds from loans granted to its clients back into the company.
Opportunity for the investor
The aim of the company is to be an indigenous company however, the company also plans to allow investors whose sole interest would be on their ROI.
The company's initial loan request is within USD 50,000.00 ( Fifty thousand Dollars) payable within 24 months. In Ghana, interest rates and other instruments are regulated by the Bank of Ghana. It is the position of the company to have a one-on- discussions with any potential investors or grantors concerning their choice on the ROI depending on their choice of the type of instrument they wish to take.
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