The purpose of UCEP SME Credit Program is to introduce and institutionalize a non-traditional banking system to contribute towards enlistment of socio economic conditions of the hard core poor urban working children and their families. The aim of the program is to provide credit facilities to the UCEP target group and their families who do not have the access to the formal credit market because of their poverty, collateral obligation and lack of know how, under special terms and conditions.

 

Eligibility

• The borrowers are selected on the basis of the following criteria:
• UCEP graduates having productive skills.
• Parents of UCEP graduates and others.
• Involved in feasible IGAs as daily wage earner or some type of business;
• Running business/enterprises of his/her own;
• Possess inherent entrepreneurial capability to run a business on her/his own
• Must be ready to employ eligible UCEP graduate in their enterprise
• Accepted by others as well behaved persons and having good moral character.
• Deposit thrift savings of Tk.100 (One hundred) every month regularly;
• Currently not involved with any other credit program run by other agencies;
• Never became defaulter by  other agencies running credit program in the area

 

Amount of Loan

The size of credit varies from Tk.10,000.00 to Tk.400,000.00 depending on the nature of IGAs proposed to be taken up by a particular member of a credit group.

 

Procedure of Disbursement & Recovery

UCEP SME Credit Program provides credit facilities to the target group through the formation of a particular Organizational structure.

Formation of group

• Only the UCEP graduates and their parents are eligible to form a group.
• A group is formed with at least five members with highest 7 members.
• All the members of the group should be inhabitants of the same area.

Duties and Responsibilities of the Group Members

• The Chairman and Secretary of a group are to maintain constant contact with the Target Group Association and the loan-giving authority on behalf of the group. The Chairmen and Secretaries of the groups will be responsible for recommending credit requirement of the individual members, ensuring proper utilization of the credit and its repayment.
• All members of a group shall remain present at the monthly meetings of the group.
• At the monthly meeting, each member of the group must deposit at least Tk. 100 as his/her savings. The amount, which is collected as monthly savings, shall be deposited in the Group Fund Account with a bank.
• In the monthly meeting the Chairman is to maintain the discipline, collect monthly dues from the individual and deposit it to the concerned head.

Joining the Group

Any person, qualified as per provisions of these regulations, may become a member of a particular group at any time subject to the consent of all the members of that group (if the number of members of the group is below seven).

Leaving the Group

• A member who has no outstanding liability may leave the group voluntarily at any time.
• If the required number of new members cannot be enrolled within the prescribed time limit, the incomplete group has to merge itself with some other groups.

 

Credit Program

Type of Credit

All credits will be issued through credit groups as individual credits retaining behind both individual and collective liabilities. All credits will be disbursed as production credit.

Duration of Credit

For simplicity of operation and record keeping a uniform period of credit will be maintained. This will be usually 12 months to 24 months.

Disbursement of Credit

The money will be disbursed through A/C payee cheques before all other members of the group at some appropriate points of time round the year.

Service Charge

Service charge @12.5% to be realised on principal loan amount on flat rate calculation.