FAQ

These are the first questions we get. If yours isn't here, feel free to ask us over at our contact page or by commenting on a post in our blog.

Why Lumana?

The name combines the latin root for hand and light in reference to providing the light of knowledge.

How can I get involved?

Lumana has a very active volunteer program that combines and immersion experience with the ability to put into practice the skills you've gained throughout your life. From filming and photography to financial projections, there is no limit to the number of ways that you can contribute. We make frequent trips to Ghana throughout the year and welcome you to come along. To learn more, check out our Become a Fellow page.

If you are not able to have an in-country experience at this time, then you can always make a contribution directly to a borrower or to the program as a whole.

What other products do you offer besides loans?

At this time we only offer loans, however we are in the process of developing lines of credit and personalized products for scalable businesses.

How do you protect against theft?

We build checks and balances into every step of our process. For example, when a client makes a weekly payment, she hands a passbook to our loan officer who writes in the loan payment amount and the amount being deposited into savings. This is witnessed by the entire group and holds our loan officer accountable. Furthermore, when our loan officer makes deposits to the bank, the amounts are verified by a community leader and the bank statement at the completion of the deposit is scanned and emailed to our US team.

Are you confident in your partners at the local rural bank, ARB?

Yes, the CEO was formerly a Ghana Central Bank agent and has also worked for institutions such as Barclays Bank of Ghana. He provides us with paper reciepts at every transaction point, frequently holds meetings with us to discuss our relationship with him, and is deeply engrained in the community.

How long will you stay with ARB? Will you soon become a Savings and Loan or other entity?

Becoming a savings and loan institution is a necessary transformation in the life of an MFI. By converting from a non government organization to a savings and loan, Lumana will be able to better utilise deposited account capital so we can realize higher profits to be reinvested and create more loans. However, the regulations and high costs surrounding that transformation take time to navigate and we are taking the necessary steps to do so.

What is your interest rate?

Our interest rate is currently 16% on a 6-month loan cycle (32% per annum).

We thought of our borrowers first when calculating a rate; we did not want to over burden them and trap them in a cycle of debt. Many of our borrowers had experienced money lending practices of 500% or more. We took a cost pricing method and chose one based on the cost of our operations.

Additionally, Muhammad Yunus, in his book Creating a World Without Poverty, states that an MFI operating at an interest rate of 10% above the cost of funds is operating ethically. The cost of funds for ARB, a local rural bank, has a cost of funds of 24.5% per annum.

How will Lumana curb high start-up failure statistics for MFIs?

Lumana is very close to those we invest in. Before entering into a village, we take the time to cultivate relationships with the chiefs, opinion leaders, and villagers before we even begin talking loans. By gaining the trust and support of each community, we ensure the security and prosperity of every stakeholder in involved.