Lending

What percentage of my loan goes to the borrower?

When you make a loan using the Good Return website, your entire loan is used to fund the application that you select. Since all loans are made in the borrower's local currency, when raising Australian dollars we ask for a little extra to cover potential exchange fluctuations prior to transferring your funds.

Why is there an administration fee on my loan?

As a social enterprise Good Return aims to be self funding and sustainable over the long term. To achieve this, we charge a separate administration fee that covers our operating costs. This allows Good Return to expand the scale of its operations and connect an ever increasing number of lenders, donors and borrowers.

Question Topics

Lending

Interest

The Borrower

Money Matters

Taxation

 
The administration fee is calculated as 10% of your loan with a minimum of $5 and a maximum of $25. Good Return has a commitment to sustainability and transparency. By charging a separate administration fee we can assure you that your loan funds will not be used to finance administrative costs.

If you choose to make a donated loan up-front, and as a result loan repayments are donated to Good Return, you will not be charged an administration fee.

When does a loan expire on the Good Return website?

Typically a loan will only remain on the Good Return website for 30 days from the date that it is posted. If a loan has not attracted any funding during this period, then it will be removed from the Good Return website, and our field partner will fund that loan from its own resources. In any event, Good Return has a policy of funding no more than 30% of a field partner’s portfolio in order to mitigate its reliance on a single funding source.

If the loan has been partly funded during this period, then the Good Return part of the actual loan will equal the amount funded by Good Return, with the balance financed from our partner's own resources.

How does loan expiration affect borrowers?

This will have no direct impact on the borrower. As explained above, in the event that a Good Return loan application expires before it attracts full funding, then our field partner will finance the balance of the loan from its own funds.

How do I find out about how the borrower I supported is going?

We send out repayment notifications approximately every 6 to 8 weeks. These repayment notifications are emailed to you and tell you how much a borrower has repaid, and how much they still have to repay. Their repaid funds are available in your account only after they have made all of their repayments.

Some loans in Cambodia are repaid in a single final installment. In this case, you will receive only one repayment notification at the end of the loan term. Of course, the funds will then be available in your account just like other repaid loans.

You can find out more about how your borrower and others are going from our monthly newsletters, our blog, and any other additional materials we may receive from the field.

How will I receive my repaid loan?

When your selected borrower repays the total amount of their loan, the funds will be credited to your Good Return account. You then have the choice to re-lend the funds, donate the funds to Good Return to support our skills development work or to withdraw the funds to your PayPal account.

How long does it take for "fully repaid" loan funds to appear in my Good Return account?

To minimise transaction costs, we aim to process all repayments from borrowers on an approximately monthly cycle. Money will appear in your account based on when our microfinance institution partner reports that the loan has been fully repaid. Because of timing mismatches between this cycle and actual receipts by our field partners, it is possible a loan may be reported as "fully repaid" but take another month for the funds to be returned to your account. If you have any questions, please emailus@goodreturn.org.
 

What happens when a borrower repays before its maturity date?

Good Return processes the final repayments when the borrower repays. If the loan has been repaid before its maturity date, then you receive your loan funds as soon as we have processed the repayment.

Who is responsible for default on a loan?

The borrower is responsible for repaying a loan and the microfinance partner is responsible for collecting repayments. If full repayment is not able to be collected, then the lender bears any loss. Historically the incidence of default on microfinance loans is low and Good Return, in conjunction with our field partners, makes every effort to emphasise the principles of good loan management.

When will a loan be considered delinquent?

A loan will be considered by Good Return to be delinquent if any repayment is more than 30 days late. We monitor the delinquency status of all of our field partners' loan portfolios. Just because a loan is delinquent does not necessarily mean that it will not be repaid in full, but it does indicate a late payment.

When is a loan considered to be written off?

A loan will be written off if the loan is more than six months late, all efforts have been made to recover funds from the borrower, and collection of the outstanding funds is considered highly unlikely. In some cases, this may be due to a disaster or the borrower falling ill.

Is there a limit to individual loan sizes? And how is it established?

Individual loan size limits are set by Good Return to ensure we maintain a pro-poor focus. However, the ability to fund multiple loans enables you to lend as much, or as little as you choose.

Can I donate my loan?

Of course! Donated loans are the default option on Good Return. If you give a donated loan, the funds come back to Good Return when it is repaid. They help support our financial literacy and skills building programs, and give even more women access to education and microfinance.

A second option for donating is after your loan has been repaid. Simply go to the Donate page and enter the amount you wish to give.

Donations over $2 are deductible for Australian tax purposes and a tax receipt will be issued. We greatly appreciate the generosity of all who donate to support the Good Return cause.

Can I lend if I do not live in Australia?

Good Return is a global online portal and we welcome lenders from all over the world. Please note that our tax receipts are only valid for Australian tax purposes.

Why is the loan disbursement date in the past?

In light of Good Return's fundraising cycle, it can take a maximum of 30 days for a loan to be funded by the public. Because the borrower client frequently has an immediate need, more often than not, our field partners will disburse the loan before Good Return collects and transfers the funds it raises from the public.

After all, it is the borrowers that Good Return ultimately seeks to help. So in order to provide quality service to its clients, the field partner may use other sources to finance the loan until Good Return funds are transferred. Be assured that without your funding, the field partner would not be as sustainable, nor achieve the same level of outreach to its poorest members.

Why are there sometimes no individual borrowers awaiting funding on the website – but instead it suggests making a loan to a Microfinance Partner?

It is not always possible to maintain a perfect balance between the volume of borrower applications on the website, and the volume of funds loaned or donated by Good Return supporters. For example, because of local holidays, or technical problems in the field or in Australia, the website may run short of individual loan requests. On the other hand, occasionally we experience a surge in loans and donations from public lenders, which can absorb all the individual borrower applications on our website.

So until this temporary imbalance resolves itself, we offer the option of making a loan directly to one of our microfinance partners. It will pool the funds with its own resources, which are then used to finance loans to its women clients. As the Microfinance Partner collects these advances, like any other borrower it reimburses Good Return. You will receive regular advice of these receipts and, at maturity, a notice of final repayment by the field partner.

Can I cancel my decision to make a loan or donation?
 
Loan
If you have completed the process of making a loan but later change your mind, you must advise Good Return within 7 days if you wish to cancel the transaction.

In that case, you should contact Good Return at emailus@goodreturn.org and provide full details (date, borrower, amount) of the loan(s) that you wish to cancel. We need this information so that we can reimburse your Good Return PayPal account with the amount of the loan(s). You can thereafter withdraw the funds at your discretion. We will not reimburse any Administration Fee that was charged at the time you made the loan.

Donated loan or a donation
If you have completed the process of making donated loan or donation but later change your mind, we regret that it is not possible for Good Return to reverse the transaction. This is because you will have already received an automatically generated tax receipt for your donation, which cannot be cancelled.
 
 
 
Interest

Does Good Return charge interest to its field partners?

Good Return does not charge interest on the funding it provides to its field partners. This reflects the fact that they meet from their own resources the costs of uploading borrower applications and reporting their loan repayments to the Good Return website. By thus partly reducing the total interest cost of our partners' funding, we strengthen their capacity to deliver services to their poorest and most disadvantaged clients.

Do field partners charge interest to Good Return clients?

Yes, our field partners typically charge a competitive rate of interest on loans to their borrowers. To ensure that they continue to provide financial services, sustainably, to their clients, field partners' income must be sufficient to recover their total funding and operating costs. So they will charge interest at a rate that covers these.

Why do the rates of interest that some partners charge seem so high?

The cost of providing financial services in developing countries is high. Borrowers are often spread across remote geographical areas, making it expensive to deliver services on a regular basis in their village. Obviously the cost structure of a microfinance institution that lends $10,000 with 100 loans of $100 each is far higher than a commercial bank that lends the same amount but in a single loan. As such, microfinance interest rates should not be simply compared with the rates banks charge for loans to their mainly urban clients. A more valid comparison is with what a rural borrower would otherwise have to pay. Moneylenders are the main alternative, and across Asia they typically charge 20% per month, or even more.

Will I receive interest on my loan?

No, loans made via the Good Return website do not earn any interest.

 
 

 

 

 

 

The Borrower

How does the money get to the borrower?

At the end of each month, Good Return tallies the funds that have been raised for loans to each field partner. It then deducts from this the sum of loan repayments known to have been received by the partner during the period. When there is a positive net balance of new loans, Good Return remits this amount to the field partner. They apply this money to replenish their reserves, which have been drawn down to fund the loans to the ultimate borrowers. When the sum of loan principal repaid in the period exceeds the amount of new loans raised, the field partner remits the net balance to Good Return.

How can I be sure of the integrity of borrowers on the Good Return website?

Good Return takes very seriously the integrity of the information that appears on our website. While we are unable to verify the details of every borrower, we have conducted a thorough assessment of the credibility of all of our partners and only work with those who share our commitment to transparency. Our initial due diligence and training visits to all field partners helps ensure this mutual commitment, and we maintain a close working relationship.

How are borrowers selected?

Each of our field partners has an existing microfinance operation under which they lend to low-income individuals. Each field partner has their own lending criteria that provide a basis for the approval of loan requests. First, the borrowers are vetted against these credit standards and, if satisfactory, approved by our field partners. Secondly, working through their partnership with Good Return, the field partners recommend the pre-approved clients for funding by supporters of Good Return via its online portal. Finally, Good Return staff review each application against its own acceptance criteria and, if it passes these, clear it for publication on the website.
 
 
 
Money Matters

Are there any audits of the use of funds?

An annual monitoring visit is undertaken for each field partner. A part of this monitoring visit includes a review of a random sample of loan clients. This confirms that funds were loaned and repaid in accordance with the field partner’s information, and also assesses the effectiveness and impact of the loans.

Why does Good Return lend in the local currency of the borrower?

Our field partners and the people they lend to operate in their own local currency, and so need funds in that currency. If Good Return were to lend in AUD or USD then they are exposed to exchange rate risk. This presents a potential extra cost that they often cannot afford, or may not legally be permitted to take. So, to reduce the risk and potential costs for local partners and borrowers, Good Return lends in the local currency of the borrower, and the Good Return lender assumes the exchange risk.

How does the Good Return lender absorb exchange risk?

Exchange rate fluctuations are an inevitable risk in all cross-border financing. Because Good Return only lends in the borrower's local currency, any gains or losses on exchange rate fluctuations are for the account of our lenders. This means that, if over the period of your loan, the local currency weakens against the Australian dollar, then when your loan is repaid you will receive less Australian dollars than you advanced. On the other hand, if the Australian dollar depreciates against the local currency, you will receive an exchange gain. A summary of such fluctuations will be provided to you at the end of your loan.

 
 

 

 

 

Taxation

Can I get a tax deductible receipt?

This depends on the method you choose to fund a loan. A tax receipt is available to lenders who nominate their loan as a "donated loan" up-front. If your loan is not identified up-front as a donation you will not be automatically eligible for a tax deductible receipt. However, after they have been repaid and if you opt to donate the funds to Good Return after they have been repaid, this donation is tax deductible and an official tax deductible receipt will be issued.

Please note that tax deductions are only available to individuals registered as Australian Residents for Taxation Purposes.

Can I get an end of financial year tax receipt that contains a summary of my tax deductible donations?

If you make donations through our monthly giving program you will receive a one off annual tax receipt at the end of the financial year. For a summary statement of one off donations or donated loans, please contact our team at emailus@goodreturn.org.

Do I need to report my loans to the taxation office?

Good Return cannot provide tax advice. If you require tax advice, then it should be sought from a professional accountant/tax specialist. All donations receipted by Good Return are tax deductible.

If my loan is written off can I claim the loss on my tax?

Good Return cannot provide tax advice. If you require tax advice then it should be sought from a professional accountant/tax specialist. Good Return is not able to issue a tax deductible donation receipt for losses on loans after those losses have been incurred. However, if you elect to make your loan a donation up front then the full amount donated is tax deductible, regardless of any future losses on the loan.

 
 
 
PayPal

 

 

 

 

What is PayPal?

PayPal, the trusted leader in online payments, enables buyers and businesses to send and receive money online. PayPal has over 100 million member accounts in 190 countries and regions. It's accepted by merchants everywhere, both on and off eBay.

Is it safe to use?

PayPal helps protect your credit card information with industry-leading security and fraud prevention systems. When you use PayPal, your financial information is never shared with the merchant.

Why use PayPal?
  • Make purchases or send money with PayPal – it’s free
  • Shop and pay conveniently by saving your information with PayPal
  • PayPal is accepted by millions of businesses worldwide and is the preferred payment method on eBay

How do I withdraw my money using PayPal?

When your loan has been repaid, we credit your Good Return account with the funds. You then have the option to withdraw all or part of this money to your PayPal account. To do this, go to the 'My Finances' page of your Good Return account and submit a withdrawal request via the form at the bottom of the page. You must use an email address registered with PayPal to do this. We will process this request and reimburse the money to your PayPal account. Please allow 7 business days for the process to be completed. You will then receive an email from PayPal notifying you that the funds withdrawn are in your PayPal account. More information and instructions on how to transfer the money from PayPal to your bank account or credit card are available from the PayPal website.
 
 
 

Gift Certificates

What can gift certificates be used for?

Gift certificates can be used for making a straight loan, or a donated loan. When you buy a gift certificate you will be given the choice of nominating it for a loan or a donated loan.

Straight loan gift certificate: This is a standard or straightforward loan. This means that when the loan is repaid to the gift recipient, they have the choice to re-lend, withdraw, or donate the funds to Good Return.

Donated loan gift certificate: This means that when the loan is repaid, the money is donated to Good Return. We will then use it to expand our programs and provide training to our microfinance institution partners and their borrower clients.

The gift recipient must use the gift certificate for a loan or a donated loan. They cannot withdraw the gift certificate funds without first using them for one or other of these purposes. Also, they will not have an option to use the gift certificate for a donation.

For how long is the gift certificate valid?

The gift certificate must be used within its 3 month validity period.

What happens if the gift certificate is not used within this period?

Any portion of the gift certificate still unused after the 3 month validity period will be treated as a donation to Good Return.

Can I get a tax deductible receipt for my purchase of the gift certificate?

If you have bought a gift certificate for a donated loan, then you will be issued with a tax deductible receipt. No tax deductible receipt will be issued for straight loan gift certificate or an expired gift certificate.

Do I need to pay an administration fee when I purchase a gift certificate?

If you have purchased a gift certificate-loan, then you will pay an administration fee. If you have bought a gift certificate-donated loan, no administration fee is payable. The gift recipient will not pay any administration fee for either type of gift certificate.

What happens when the loan is repaid to the gift recipient?

Straight loan gift certificate: The recipient chooses the person they would like to lend to. When the loan is repaid, they have the choice to re-lend, withdraw the money or donate the funds to Good Return.

Donated loan gift certificate: The recipient chooses to whom they wish to lend. When the loan is repaid, the money is donated to Good Return. We then use it to help expand our programs and provide training to our microfinance institution partnersand for their borrower clients.

Does the whole amount of the gift certificate need to be spent at once?

No. The recipient can choose to use the gift certificate for a single loan, or for any number of loans. For example, a $100 gift certificate can be used by the recipient to make a single $100 loan or donated loan, or to make four $25 loans or donated loans, to different borrowers or on different dates. The only restriction is that the full amount of the gift certificate must be used within the 3 month validity period.
 

Redeeming a Gift Certificate

What are the different types of gift certificates?

As a recipient, you will have received either a straight loan gift certificate, or a donated loan gift certificate.

Straight loan gift certificate
This gives you the choice of making either a standard, straight loan, or a donated loan. This type of certificate will appear as gift credit (no restriction) in your account.

A loan is where the funds are repaid to your Good Return account at the end of the loan term. At this stage you can:

  • Lend again - and help even more women!
  • Donate the funds to Good Return
  • Withdraw the money

A donated loan is the same as a standard loan in that you choose whom you would like to lend to. But when the loan is repaid, the money is donated to Good Return. We use the funds to help us expand our programs and provide training for microfinance institution partners and their clients. If you use your gift certificate for a donated loan, you will be sent a tax deductible receipt immediately.

Donated loan gift certificate
A donated loan certificate will appear as gift credit (restricted) in your account. You choose whom you would like to lend to. When the loan is repaid, the money is donated to Good Return, to help us expand our programs and provide training for microfinance institution partners and their clients.

How does a recipient redeem their gift certificate?

  • To redeem a gift certificate, you should take the following steps:
  • Visit the gifts page and click the 'Redeem' button.
  • Copy and paste in your gift certificate code into the 'Redeem' box.
  • Choose a person you would like to lend to.
  • Decide how much you want to lend to each applicant or borrower. You can lend the full amount of the gift certificate to one applicant, or you can choose to split the proceeds of the gift certificate among a number of applicants. You do not need to spend the full amount of the gift certificate at once.
  • If you have received a straight loan gift certificate, then at checkout choose if you would like to use it to make a donated loan or a straight loan.
  • Make sure you use the full amount of the gift certificate before its expiry date (which is 3 months after it was purchased).

 

 

 
 
 
 
Do you still have a question? No worries, we're happy to help. Send us an email.
 
 
 
 
 
 
 
 
 
 
 
 

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Good Return is an Australian charity that provides microfinance and education to the poor in the Asia Pacific.
© Good Return 2014. Good Return is an initiative of World Education Australia, an Australian Aid accredited agency. ABN 39 106 279 225
World Education Australia is a member of the Australian Council for International Development (ACFID) and is a Public Benevolent Institution.