The mechanics of our micro loans program are as follows:
- Selection of recipients – A community referral system and interviews with applicants are used to identify applicants. Applicants are qualified based on need, ability to learn, and willingness to work hard to make their business a success.
- Business training – A four-day intensive business training is provided selected loan applicants. On successful completion of this training, the women qualify for a loan.
- Working as a team – Loan recipients form groups of 3-5 women and are expected to work together so they can support each other in running their businesses. This leads to strong social networks is a critical component for success of their businesses.
- Loan capital is revolving – Once approved, the women receive $175-200 (depending on the exchange rate) to start or expand business. Each loan recipient receives three loans of the same size. Loan recipients who have successfully repaid the first loan are eligible to receive a second loan to expand or further develop their businesses. This process is repeated once the second loan has been repaid. For example, a woman may rent a knitting machine in her first loan cycle, but by the end of her third loan cycle she may have enough funds to purchase a used knitting machine. Loan capital is revolving; after repayment these funds are used to provide loans to new women.
- Weekly support meetings – Loan recipients make equal repayments over a period of 25 weekly meetings. These weekly support meetings provide them with the opportunity to ask questions and discuss topics that are relevant to their businesses and home. Often, partnerships are built at this time.
- Business mentorship meetings – Successful women entrepreneurs from the community, including program graduates, are invited to have a conversation with new loan recipients about their experiences and challenges in running a business. They discuss successes, challenges, and other business-related issues like inventory management, store location, design, and layout.
- Business monitoring – Our loan officers regularly visit the businesses on-site to provide business mentoring and advice.
- Refresher training – All participants receive refresher business training at the end of the second loan cycle to share challenges and find solutions.
- Assessment – During the course of the three loan periods (about 24-28 months), loan officers evaluate businesses in terms of capital growth, business expansion, savings, bank accounts, expenses on education, household items purchased, investment in assets such as land or extension of homes. For example, a sign of a successful business could be a move to selling from a shop in a busy market place from selling in the street.