Loan term refers to the number of months a loan will take to be repaid. Loan terms vary from 2 months (Nanoloans) to more than 12 months. Length of the loan term changes according to the amount being borrowed and an entrepreneur's ability to repay that loan within a set period of time.
It is important to note that loan terms only start once a loan has been implemented - that is, the entrepreneur has actually received the energy product. There are three steps to getting your loan into your entrepreneur's hands, and each one takes time.
- Loan is fully funded on the website
- Field partner receives the money you have loaned
- Field partner distributes the energy product into the entrepreneurs hands
The loan term only starts ticking once Step 3 happens - when the entrepreneur has actually received the product - we call this the implementation date and you will receive notification via email when this happens.
We sometimes get asked why it takes a few weeks for our loans to be implemented.
There are two main reasons, both of which are fairly unique to EIC and to energy lending.
- We at EIC have made a conscious decision not to pre-fund entrepreneurs. Pre-funding is the practice of posting a profile after a loan has already been made to that entrepreneur. We do not currently pre-fund loans because we feel that it is important that lenders have as direct of a connection as possible with the entrepreneur they are funding. The decision not to pre-fund entrepreneurs means that your money not only makes the difference between an entrepreneur receiving a loan or not, but it also means it takes time for a fully funded loan to be transferred to our field partners.
- Entrepreneurs receive a product, not just money. Typical microfinance involves the delivery of a cash loan to an entrepreneur. Our loans supply actual products, like a solar lamp or a clean burning stove. It takes time for the products to be delivered into the hands of the loan recipients and issues like product shortages or delivery delays can affect the time it takes to implement a loan.