Key Findings in August

Fifty-one percent of respondents have taken a loan to finance their reconstruction.  owever, as households advance through in the reconstruction process, their likelihood of needing to take a loan increases. While only 35 percent of those who have gotten the first tranche have taken a loan for reconstruction, 61 and 63 percent respectively of those who have the second and third tranches have taken loans, and 66 percent of those who report having already completed their reconstruction have taken a loan to do so.
The majority of respondents are borrowing from informal sources, with neighbours (38 percent) and friends and family (31 percent) topping the list. These informal sources carry the highest interest rates, and are potentially the most damaging to the long-term economic recovery of earthquake affected communities. The issue of indebtedness continues to grow, and presents itself across reconstruction, and livelihood recovery questions. Community members in focus groups expressed
grave concerns about how to escape the debt trap they feel they are in.

What are people saying?

Where did you take the loan from?

38 %

Neighbours

31 %

Family/ relatives

21 %

Co-operatives

14 %

Bank

8 %

Community groups

1 %

Others

What is the average interest rate (annually)?

25 %

Neighbours

21 %

Family/ relatives

19 %

Bank

17 %

Co-operatives

15 %

Community groups