Stara Microcredit believes in Banking for the un-bankable. Since many applicants cannot offer collateral, we pool borrowers together as a buffer. This simply means, the group will stand together from the borrowing to the repayment. After receiving loans, recipients repay their debts together. Essentially, the success of the service depends on everyone’s contributions, this creates a form of peer pressure that can help to ensure repayment.

For example, if an individual is having trouble using their money to start a business, that person can seek help from other group members or from the loan officer. Through repayment, loan recipients start to develop a good credit history, which allows them to get larger loans in the future. On top of this Stara encourages a saving culture by teaching group members proper financial etiquette and management.

Even though the groups and individuals that seek micro financing services are often classified as ‘poor’, microcredit institutions often record approximately 98% loan repayment rate. Much better than the traditional institutions. At Stara we attribute this to our flexibility and customization of repayment options to the groups that engage with us. Our loan officers take their time to come up with amicable and realistic terms that are manageable for the group, without straining them, or driving them out of business. We are all for the growth of businesses and empowerment of entrepreneurs.