Dien Bien Phu: Not sure they like our loans?

In December, we adapted to the demands of our clients by modifying the repayment schedule of the loan principal, interest and savings of our loan product from bi-monthly to monthly. However, given the prevalence of the government subsidized banks that offer low-interest (0.65%/month), large ($300-$500), long-term loans (3-5 years) with principal and interest repayments at maturity, we are encountering difficulty promoting our loan products that are higher interest rate (0.94%/month), small ($60-$100), short-term loans (6-12 months) with monthly principal and interest repayments. We engineered this loan product as a complementary loan to the government loans for short-term cash flow needs with loan features tailored to low-income households’ repayment capacity as it is easier to pay small amounts over time then one lump sum at the end. However, we are currently improving our marketing strategies by hiring local women with experience paying similar microfinance loans to help promote our products and by offering an additional loan product that may be more tailored to our clients’ business activities.