Peer Lending Model

"Peer lending" or "solidatiry lending" is an important component to the success of micro loans throughout the world.

Once an entrepreneur is granted eligibility for a micro loan, he/she must agree to become part of a Peer Lending Circle, usually consisting of the other members of his/her Business Training cohort. It is in the best interest of the individual members of the Peer Lending Circle to meet regularly and help each other towards individual success because second and third micro loans cannot be granted to any member of the Circle until all loans in the Circle are paid back in full.

Peer Lending Circles may decide to set higher minimum payments for loan repayment than GEODE requires and may even choose to collect additional interest on the loans within the Circle for the purposes of establishing an "emergency fund" that can be accessed only by members of that Circle when they are unable to meet minimum payments.

How the Peer Lending Circles are managed is up to the members themselves and any funds collected by additional interest charges above GEODE's minimum interest rate of Prime plus 1, although collected and managed by GEODE, is the sole property of that Peer Lending Circle. If the Peer Lending Circle dissolves, either because all three loans are repaid or for another reason, the additional interest collected will be distributed back to the members of the circle.

Peer Lending Circles are designed to empower loan recipients to take charge of their repayments and to create support groups working towards the ultimate goal of everyone's joint success. Although the Circles have a great deal of independence in how they operate, GEODE staff is available to help manage Circles or to resolve disputes if they occur.