Unlike traditional microfinance, which provides monetary loans for working capital to informal businesses, Rent to Own loans productive assets or equipment to viable small-scale entrepreneurs in rural areas, especially farmers. Also unlike traditional microfinance, the asset itself acts as a form of collateral which helps reduce the client’s chances of spiraling into debt and further poverty.
Our business model focuses on providing equipment with a set of services including tailored financing, delivery, and training on equipment maintenance and repair in order to give each client a comprehensive set of skills and knowledge to use the asset to catalyze their business growth.
Rent to Own has tailored the traditional micro-finance model to suit the local business culture here in Zambia. A long history of unenforced donor loans from NGOs and bilateral organizations has resulted in low repayment rates in many of these rural communities. We therefore have addressed this problem by maximizing our efforts to fully understand each client’s individual industry before the application process in order to better assess the viability of each client’s business plan and therefore, repayment capacity.
Innovative Technology for Rural Field Operations
Rent to Own uses cutting-edge communications technology to carefully manage a widespread field operation that is fast, efficient, and effective. A centralized cloud-based management system keeps each member of the Rent to Own team up to date with the latest information on our clients. Our management team also gains access to instantaneously updated overviews of our portfolio and operations. An automated SMS system also sends clients reminders and keeps them informed of the status of their applications.