Loan Eligibility Requirements
The general requirements for loan eligibility are as follows:
- The applicant needs a current CNIC.
- Possessing the capacity to carry out or start business activity being between the ages of 18 and 62. The applicant must be engaged in the economy.
- The applicant should not be found guilty of a crime for which legal action is being taken.
- The applicant should be of high moral and social standing in his neighbourhood.
- The applicant must be able to secure two guarantors who are not family members.
- The applicant must live within the branch office’s operational area, which may be approximately 2-2.5 KM away.
- The eligibility requirements for each Nota-Project may change.
Lending Methodology
AIM’s lending policy involves disbursement of interest free or Qard-e-Hasan loans through Group Lending. However decision of lending methodology depends upon the loan product as well as project specific requirements
Team Lending
The practise of “group lending” refers to the distribution of Qard-e-Hasan loans among groups of men and women who want to increase their family’s income but are unable to guarantee the loans and qualifications of each individual. In the group lending methodology, groups of three to six people will be formed.
Through cooperation and decision-making, group members can use group lending to solve their social and financial issues. To qualify for a loan, a group of three to six people that live close by and are not related to one another closely is required.
Submitting an application
Application submission will initiate the loan process. The application fee varies depending on the programme. The application will next be assessed by the unit manager using the eligibility requirements. As a result, these debts will be disbursed against social security. The steps for submitting an application are as follows.
The applicant will visit the closest AIM branch with the necessary documentation (listed below) to submit the loan application. The unit manager will speak with the applicant to see whether they meet the program’s eligibility requirements. The potential applicant will submit a loan application using the template provided. The staff at the branch office of AIM will supply and complete the loan application.
After the completion of the necessary documentation, the unit manager will review the submitted paperwork and process the application.
The specifics of the collateral that may be used as security for loans are as follows:
1. Personal responsibility
2. Two guarantors
3. Postdated cheques
4. Any additional collateral in special case.
Following documents shall be submitted along with loan application:
- Copies of CNIC
- Latest Utility Bills
- Applicant (Mandatory)
- Applicant (Mandatory)
- Guarantors (Mandatory)
- Objective
- Family Member (Optional)
- For address verification
- To assess Payment
- For Identification
- Behavior
- Management Information
- System (MIS)
- Bank Requirement for
- collecting money
- Latest Photos
- Applicant (Mandatory)
- Copy of Nikahnama
- Applicant Mandatory/(may be waived if not available after
- verification by other means)
Social Evaluation
By visiting the applicant’s home, social appraisal seeks to confirm the applicant’s trustworthiness and character. Following receipt of the application, the unit manager conducts a social appraisal using the techniques listed below.
1. Information from existing borrowers
2. From the living style of the applicant
3. Views of neighbors about the applicant
4. Personal interview/ family interview
Business Evaluation
The prospective borrower’s company idea will be examined through the examination of business plans to determine whether it is feasible and whether it can produce income above and beyond household expenditures sufficient for loan repayment. In business appraisal, business requirements are assessed. Additionally, this will help the applicant’s business plan itself be improved. In order to confirm that they are aware of the loan and support the company plan, the applicant’s family will also be questioned.
Second Assessment:
After the application has been initially evaluated by the unit manager, it will be sent to the branch manager, who will evaluate the social and business appraisal process once more. assemble the borrower and their guarantors for a meeting.
Guaranteed Lenders
Every application for an individual loan must submit two guarantors who can attest to his or her qualifications, accept responsibility for keeping tabs on the borrower, and provide assurance that the borrower will make loan payments on time. While in group lending, each member would provide a guarantee for the other members forming a formal group.
LAC, the Loan Approval Committee
There will be a Loan Approval Committee (LAC) for each branch. The Area Manager serves as the committee’s chair, and the Branch Manager and unit managers also serve on it. The committee will examine each credit case. The loan is complete and prepared to be disbursed if the committee approves the application. It takes about 3 to 4 weeks to complete the process.
Fund Request and to the Head Office
Following Loan Approval Committee (LAC) approval, Regional Managers submit requests to head office for the necessary amount of funds. The head office makes the required preparations for the money to be transferred into the appropriate bank account for distribution. Once funds are transferred to their bank account, the local accountant will be notified. The checks are prepared by the local accountant for distribution to qualified applicants.
Loan Disbursement
Loans will be disbursed through an event that is often hosted at a mosque or church once each month. For individual loans, the applicant must be present with at least one of the guarantors. When group lending is involved, everyone in the group needs to be present when the money is disbursed. The points listed below are pertinent to the loan disbursement event:
- Every individual will be present at time of the disbursement. In case any borrower is absent, loan will not be disbursed and may be cancelled.
- •All borrowers will bring their original CNIC in the disbursement event
- Borrowers would receive cheques of the loan amount santioned to them
- Acknowledgement of cheques would be taken from each be rower
- The disbursement event would be monitored by Area Manager
Social Counselling
The capacity of borrowers will be strengthened to carry out their task more efficiently and effectively, particularly keeping in mind the Islamic or ethical standards, through the simultaneous briefing of social guidance at disbursement events.
- Social agenda items include:
- Emphasis on girls’ education
- Serving the community at large
- Protection and improvement of environment
- Importance of plantation
- Observance of traffic rules and local laws
- Following highest ethical values in business
- Recovery & Follow up
After the loan has been disbursed, the unit manager keeps an eye on the client by paying frequent visits to both his home and workplace. The loan must be repaid at the ranch by the seventh of every month. The unit manager visits the customer to remind them to pay if they haven’t by the 10th, and if they still haven’t, the guarantors are called.
