How much will he pay in fees? (Count out 1 counter1 to represent 10 dollars.) Finally, he must also pay to take a taxi to Credit MFI’s agent each month. The cost of each return trip is 5 dollars. How much will he pay in total for transport over the 6 months? [30 dollars] (Count out 3 counters to represent 30 dollars.) Explain the difference between direct and indirect costs: Costs of a Loan Direct Indirect Payments on the loan Transport to and from the financial itself. (Called principal) or agency institution’s office Interest Wages paid to a worker to keep a business Fees for service open while you travel to repay the loan Insurance Income lost when closing a business or not Any late penalties working because of traveling to repay the loan Ask: What is the total cost of Mr. Blessings’ loan – not counting the initial capital? [110 dollars] Say: It is important to emphasize to VSLA members who are new to using – financial services that these costs are not there because banks want to steal – their money. The important thing is to understand all of the costs and to make an informed decision before borrowing. Step 3: Good loan or bad loan? 20 minutes –
How much will he pay in fees? (Count out 1 counter1 to represent 10 dollars.) Finally, he must also pay to take a taxi to Credit MFI’s agent each month. The cost of each return trip is 5 dollars. How much will he pay in total for transport over the 6 months? [30 dollars] (Count out 3 counters to represent 30 dollars.) Explain the difference between direct and indirect costs: Costs of a Loan Direct Payments on the loan itself. (Called principal) Interest Fees for service Insurance Any late penalties Indirect Transport to and from the financial institution’s office or agency Wages paid to a worker to keep a business open while you travel to repay the loan Income lost when closing a business or not working because of traveling to repay the loan Ask: What is the total cost of Mr. Blessings’ loan – not counting the initial capital? [110 dollars] Say: It is important to emphasize to VSLA members – who are new to using financial services – that these costs are not there because banks want to steal their money. The important thing is to understand all of the costs and to make an informed decision before borrowing. Step 3: Good loan or bad loan? – 20 minutes
3._access_africa_master_tot_manual.docx