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CEP Loan Use

In 2012, 47% of all CEP loans were used for working capital to fund trading activities, 13% of loans were used for housing and sanitation improvements, 1 ...

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CEP has developed a number of financial and non-financial products and services tailored to the needs of the poor. To accommodate clients CEP employs flexible methods to disburse and collect on its financial products and provide its non-financial services. Each client is prioritised for a loan on the basis of their monthly per capita income, assets, housing quality, and the number of dependents that they support. Target clients include the poor and poorest, with a special emphasis on female heads of household and migrant labourers. Clients must not have access to other formal credit services, they must be capable of using the credit provided, agree to abide by the regulations of CEP, and be willing to attend group training and weekly meetings.

Due to the poverty level of the clients and the need for clients to improve their economic situation, the primary CEP product is credit for income generation. All credit provided by CEP is intended for a specific purpose however CEP does not discourage the use of loan monies for other purposes such as the purchase of food, education and healthcare. The type of activity that CEP clients choose to invest their loan monies in is entirely at their discretion, however they are provided with assistance in developing a business plan, both by the Credit Officer and members of their Group and Centre. Clients choose to invest their loans in a diverse array of income generating activities from the purchase of stock for animal breeding, fishing nets, agriculture, basket and mat weaving, transportation, tailoring, and embroidery among other activities.

The CEP methodology for delivering financial products and services is based on the Grameen methodology where a number of clients form a Group, several Groups form a Centre and several Centres are serviced by a Credit Officer through the CEP Branch Network. The CEP Credit Officers deliver all products directly to clients through the Centre and Group system.

CEP provides the following financial products:

  • Two basic income generating loan products; a weekly loan product targeted at labourer clients, and a monthly loan product targeted at worker clients. Each of these loan products are intended to be used primarily for income generation.
  • Two savings products; a compulsory savings product for recipients of CEP credit, and a voluntary savings product.
  • A housing improvement loan, offered to clients with a strong repayment record over three loan cycles. This product is intended to be used to improve the condition of a client’s housing.
  • A small business loan to provide credit for the development of small enterprises operated by
    low-income households.
  • An environmental improvement loan product that can be used by clients or a group of clients to install individual and collective sanitation systems.
In addition CEP provides the following non-financial services:
  • Dissemination of educational materials on individual and community health and sanitation.
  • Financial education training to CEP clients, focusing on budgeting and saving.
  • Education scholarships to the children of clients at risk of leaving school before the age of 15.
  • Livelihood development programs for clients unable to meet their basic needs.
  • Provision of housing for clients that do not have access to adequate shelter.
  • Immediate financial assistance to clients experiencing difficulties. This includes assistance to clients and their immediate families to pay for emergency medical treatment and funeral costs.
  • Provision of basic foods and goods. This consists of the provision of packages of rice, cooking oil and other basic necessities for client families.

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