The Grameen model
Not the Government nor a bank
Malta Microfinance runs as a Church based not for profit organisation although under Maltese law Malta Microfinance can not legally be an NGO since it is also a financial institution.
When a bank lends money the borrower is required to have collateral to act as the bank’s security if they do not repay. So if they lend you a mortgage and you default then they can take your property.
Malta Microfinance differs to this, in that all our loans are unsecured hence, we rely on the relationship of trust that we create with you.
Malta Microfinance lends to groups of two or more friends who are requesting a loan for the similar purposes. The success of group lending relies on the peer support and pressure of the solidarity group to ensure that all members repay their loans.
We also develop relationships of trust through regular communication and offer general support to our clients. receive assurances that the loan will be repaid and that you will not leave Malta with the loan outstanding.
Clients who have successfully repaid their loans are then able to access further loans in the future.
In the exceptional case where a solidarity group is not practical, then you will be required to find somebody, respected in the community, who can vouch for you. This is not to act as guarantor but to confirm that you are trustworthy, that you will repay the loan, and that they will help Malta Microfinance maintain contact with you.
Keeping in touch
Communication is key to build a relationship of trust between Malta Microfinance and the borrower. The support worker will meet the solidarity group on a monthly basis and meetings are not limited to when repayments are due.
The monthly meetings are held to discuss the progress and challenges the borrower might have faced since the last meeting. If your business is not doing as well as hoped or if you have lost your job or you are still waiting for your benefits to be processed then we will understand and assist you.
The key to this is that we have a relationship of trust where you keep us informed of what is happening and do not stop answering calls or not coming to meetings if things start to go wrong.