The Family Economic Unit in Microfinance
September 3rd, 2010 | 
Author: A basic principle in microfinance is the joint assessment of the business unit and the household of the customer. Moreover, a visit to business and customer premises is part determines the credit assessment. It is not enough to determine the utility generates. It is also important to estimate household expenditure is consuming.
All Credit Analyst should know the number of dependents of the family unit, to calculate the expenditures on food and clothing. Also, you should inquire about the educational level of children (initial, primary, and secondary, university) to determine the costs texts, supplies, mobility and tips, and in private if the amount of pensions.
It should also be consulted on health expenditures. The age of the pensioner and spouse may be helpful.
Another important aspect is to know the customer consumption habits: eating out usually? Usually go on weekends?, Do you ever travel or vacation?, Do you pay cash or have loans to such concepts?. If so, how much it means a month, in monetary terms?
The ownership of the house is another important factor: is own or are paying for? If you own: how much will be recovered? If you are paying, how much is the monthly fees? By the way, if hired would be a bad sign, since the exit barrier might be very low, even worse if the business premises is also leased.
Service charges also merit special attention: How much you pay for water, electricity, telephone, cable, internet service, monitoring? Is there domestic worker?
There are also hidden costs such as maintenance of parents or some relatives (mostly unemployed). If so, how much is the monthly allowance that they intended?
In short, the Credit Analyst job must be comprehensive and, above all, honest, to the effect that the ratios reflect the totality of the information in the economic and family unit of the client.
Finally, it is very important not to overlook never let the client’s personal references that necessarily must collect from the neighbors, suppliers and business of the same item. Knowledge of the potential borrower’s moral quality we can examine another important aspect of credit assessment: the willingness to pay of the debtor.
