Lending to Agribusinesses in Zambia

Table 4. Characteristics of Selected Microfinance Programs

	ZATAC, Zambia	Grameen Bank, Bangladesh	Banco- Sol, Bolivia	Bank Rakyat Indonesia, Unit Desa	Badan Credit Desa, Indonesia	FINCA Village banks
Membership	655 in 22 coops¹.	2.4 million	8,503	2 million borrowers, 16 million depositors	765, 586	89,986
Average loan balance	$1,624 for coops, $90,872 for institutional borrowers	$134	$909	$1007	$71	$191
Typical loan term	3 months - 10 years	1 year	4-12 months	3-24 months	3 months	4 months
Percent female members	26%	95%	61%	—	23%	95%
Mostly rural? Urban?	Mostly rural	Rural	Urban	Mostly rural	Rural	Mostly rural
Group lending contracts?	Both group & individual	Yes	Yes	No	No	No
Collateral required?	Yes, except for coops	No	No	Yes	No	No
Voluntary savings emphasized?	Yes, in their own bank accounts	No	Yes	Yes	No	Yes
Progressive lending?	Yes	Yes	Yes	Yes	Yes	Yes
Regular repayment schedules?	Flexible	Weekly	Flexible	Flexible	Flexible	Weekly
Target clients for lending?	Largely poor	Poor	Largely non-poor	Non-poor	Poor	Poor
Currently financially sustainable?	No	Yes	Yes	Yes	No	No
Nominal interest rate (on loans per year)	9.5 - 12% ($ loans) 20.9% (ZMK loans)	20%	47.5- 50.5%	32 - 43%	55%	36 - 48%
Annual consumer price inflation	15.9%	2.7%	12.4%	8.0%	8.0%	—
Real interest rate	5 - 9%	17.3%	35.1- 38.1%	24 -31%	47%	—

¹ ZATAC is not membership based; the figure shows the number of cooperative members borrowing through their
respective cooperatives.

Source: Morduch, 1999; except ZATAC figures which are based on data from ZIF office.

The comparison of ZATAC with other microfinance institutions reveal that there
are common features employed by these institutions. The common features include:

1. Group lending : ZATAC uses group lending by offering credit to rural small-scale
agricultural producers through cooperatives. The members of a cooperative are
28

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