Frequently asked questions:
What are the qualifications for a micro-loan?
Members are chosen through a number of factors: expertise in business management, family conditions (i.e. widows are given preferential treatment), gender equality, and if the candidate is well-respected in the community. One does not have to be a Christian to receive a loan, though we recognize that many candidates are selected because they are visible leaders in the community to include regular church attendance or functional position within the church.
Why can’t these people qualify for loans at a bank?
People in poverty are usually unqualified for loans because they lack the collateral and sometimes even the proper identification to receive a loan.
What types of businesses are people looking to start?
Over time, we’ve seen a wide range of businesses start up. Businesses include selling of goods like clothing, hygiene supplies, charcoal, and food staples as well as selling cooked food. In rural areas where we work, many residents choose to get poultry to raise and sell.
What is done with the money when the loans are repaid?
The loans will be re-issued to either the same beneficiaries—in order to expand their businesses—or to new candidates.
How do you ensure accountability of the loans?
Loans are distributed directly to the business owners our partners in each community. We ensure that beneficiaries sign a micro-loan contract and accountability document after they have received the loan. Month-to-month collection is managed by the local partners with period reports of progress of each beneficiary.
What is the timeline for repayment?
Payback is either 6-months or 12 months, depending on how much the candidate needs of the profits and how much profits the candidate expects to make.
What mechanisms are in place to ensure that the people repay the loans?
Normally, repayment accountability has a lot to do with peer pressure in a systematic way. We set off the candidates in a group, so they are accountable to each other – and recognize that the life of the program is contingent on their repayment.