Proverbs 19:17 – Whoever is kind to the poor lends to the LORD, and he will reward them for what they have done.
During our Meridian Avenue special business meeting on September 25th I mentioned the concept of micro-loans as a mission outreach to help fund a micro business. Not at that moment having sufficient time to give a proper introduction to the micro-loan ministry, I shall attempt to do so now.
A microloan is a small loan to begin or to re energize a small business. Micro business loans are often granted without requiring collateral and are at a very low interest rate. The concept isn’t specifically a ministry concept; a great number of micro-loans are available for a wide number of business needs in several countries. This writing is concerned only with micro-loans that are mission oriented.
I was in El Salvador when I first heard of a micro-loan being used as a means to raise people out of poverty. While our mission team was visiting with the Federation of Baptist Churches, El Salvador, we were told that micro-loans were being used to help the impoverished to start a small business. One member of our host church had received a small loan, as seed money, to purchase the necessary supplies to begin a candle making business.
On a later trip, while in Nicaragua, our mission team was introduced to a representative of a Nicaraguan micro-loan organization. He had brought several items that had been made by micro-loan recipients to show us and was hopeful that we might purchase them. The items he brought included a number of small paintings and a number of women’s leather purses.
The purses had a success story that the representative shared. A few women of a rural Nicaraguan community had approached the organization about applying for a micro-loan to begin a leather purse business. The organization approached the community as a whole and explained how they would provide the seed money at a very low interest and would also work with the community to help market the products that they produce. Several of the women of the community were interested but the men thought that making purses was ‘women’s work’.
The women produced some very nice leather purses and the lending organization was able to find a buyer for their products. The lending organization returned to the community and again held a community wide meeting. When all had gathered, the lending organization made a considerable effort of praising the women purse makers for their work and then presented each of the women with their share of the money earned. It is worth mentioning that the women, having received their earnings, collectively held more money than had ever been held at any previous time in that community.
The small leather business was transformational. The men quickly began producing leather crafts alongside the women and the sales of their products increased capital in the entire community. The increased capital began to generate spin off businesses. Small stores began appearing to provide household products and other items that were previously unaffordable to those in the community. Over time the entire community prospered.
Here are some 2020 statistics about the impact that Mentors International have posted on their website about the microloans they have made. (Link to their website found further below.)
90% of their loans were to women. (I was once told that women have a better record of repayment of the micro-loans.)
Mentors International has experienced a 96% repayment rate.
The average annual income for the person receiving their micro-loan was an increase of 157%.
The average loan size that Mentors International has provided is $132.
The average cost of helping an individual reach self reliance is $137.
This is a link that speaks of an ABC International Ministries project to create microloans for Hatian women. I am pleased that this project is funded 100%.
Here are a few links where more information on micro-loans ministries can be found.
https://www.theneofund.org/focus/nicaragua/