On the other hand, the small group's better ability to self-govern and monitor each other reduces the need for regular formal group meetings led by UMU staff. Smaller group sizes facilitate informal communication between group members, thus simultaneously increasing the responsibilities of individual group members, while making the responsibilities of the group as a whole more manageable. Since the need for regular group meetings is reduced through the use of small groups, individual borrowers are responsible for delivering their loan payments on-time to field agents or to UMU offices, rather than in the context of group meetings. It is our belief that this additional effort required on the part of the individual contributes to the process of learning financial responsibility and discipline faster. Graduated loan amounts With a view toward teaching and rewarding financial discipline, each new member has initial access to a loan of shs.
Loans continue to increase by increments of shs.
50,000, with access to higher amounts being guaranteed by timely repayment of previous loans. While performance of other group members does not affect the possibility of an individual to move to a higher loan amount, late payment by one group member does have an effect on the timing of loan disbursements for other group members. Each micro-enterprise is different, with its own cash flow schedule and investment needs. Our policy is therefore to allow the entrepreneur to determine, within set parameters, the speed with which loans are to repaid, and thus the rate at which higher loan amounts are accessed. According to the specifics of the enterprise, a borrower can choose to repay in weekly, bi-weekly or monthly installments, over a period not exceeding 6 months.