Microfinance for Women
What is Microfinance? Microfinance programs have been successful in helping women break the vicious circle of low education and poverty globally. These programs provide training in income generating skills and small loans (without collateral) to women in impoverished communities. Loan funds are used to start small businesses; earnings from these businesses help pay for food, medicines, rent and school fees. Worldwide repayment rates for micro credit vastly exceed that of traditional banking.
Can we end poverty? We believe that together we can end poverty and hunger. According to the UN, this is possible, the UN's Sustainable Development Goals for 2030, include ending poverty and hunger.
Vision, Mission, Goals: Our vision is for impoverished communities to become sustainable, and more self-reliant. Our mission is that vulnerable women are economically and socially empowered and families are sustainable and more self-reliant. We are trying to achieve our mission of building sustainable families and communities with the provision of education, training, and loans to vulnerable women in Zambia. The goals of this program are to: (i) equip women with the tools they need to run a successful business, (ii) create conditions for women to be socially empowered, and (iii) ensure that the women have gathered enough capital and savings so they can continue to operate a profitable business even after graduating from the program.
Location: This program is located in Matero, one of the largest and poorest compounds in Lusaka, Zambia. The community of Matero is characterized with a high incidence of HIV, AIDS, and malaria and an unemployment rate upwards of 60%. Most residents are poor and live on less than $2 per day - defined as extreme poverty by the UN.
Need: In order for an HIV+ child to improve in health, it is critical that the child receives proper nutrition. Unfortunately the AIDS epidemic has led to a loss of life in the middle generations and destroyed the fabric of the African community. Many households are headed by grandmothers who are left with the responsibility of caring for five or more orphans. Most of these grandmothers have never been to school, have very few marketable skills, and no permanent source of income. These women need our support so that they can provide basic necessities such as food, medicines, rent and school expenses for the children. One of the most effective ways of achieveing this goal is by provision of training and small loans to women.
Exciting Developments in 2018
The following program activities have been completed in 2018: (i) Added 50 new loans to bring the total number of active loans to 400 that benefit approximately 2800 family members, (ii) 82 new women were provided with business training and 93 women with refresher trainings, (iii) All women meet weekly to make repayments, learn from other business owners, and build social networks, (iv) All businesses are visited on site by the loans officer to provide business advice on product display, maintenance of accounts, book keeping, inventory management etc. (v) Mmebers of the mentoring club encourage other women to face challenges, work hard and keep their children in school and (vi) women have learnt how to overcome severe challenges such as the cholera outbreak earlier this year.
Loan repayment rates are between 88-90% despite difficult circumstances faced by most women.
Exciting Developments in 2017
In 2017, we completed the following program activities: (i) New loans provided to 53 women bringing the total number of loans to 400, (ii) A record number of 257 women were provided with business training, (iii) all women meet weekly to make repayments, learn from other business owners, and discuss issues of importance to them such as HIV prevention and care, importance of school, and challenges faced in running their businesses, (iv) Businesses are monitired as all businesses are visited on site by the loans officer to provide business advice on display, encourage maintenance of accounts, book keeping, inventory management etc., (v) Refresher training was provided to a group of 50 loan recipients, (vi) A few women have formed a club to mentor new loans recipients, women whose businesses may be struggling, and women facing challenges in running their businesses. Read more
Exciting Developments in 2016
In 2016, we were able to provide 100 new loans to first time women entrepreneurs and business training to 150 first time women entrepreneurs. A record number of 150 new businesses were launched in 2016. As a result of this program, more than 600 businesses are running in the community that add value by providing convenience (in terms of location, and quanity purchased), and diversity (businesses like hair salons are new to the community). Read more..
Our Program is Unique?
Our program is unique as it is designed for women who themselves may be HIV+, are the primary caregivers for HIV+ family members, and have very few marketable skills. Second, it is completely integrated with our pediatric HIV care, malaria prevention, and Safe Park programs, so we are able to support a family in multiple ways. For example, micro loans recipients are encouraged to enroll their HIV+ children in our pediatric HIV care program. If enrolled, the child receives food, medicine and a package of life-saving healthcare services. In addition, the loan recipient is provided with mosquito bed nets to keep the family free from malaria, and the child is encouraged to participate in our “Safe Park” program. Supporting first time women entrepreneurs in multiple ways also increases the probability of success of their business and leads to higher repayment rates.
To date, POL has provided more than 2000 loans to women caregivers of HIV positive children. Repayment rates are over 90%.
Women enrolled in our micro loans program receive business training and loans to start a business. Earnings from these businesses enable women to pay for food, medicines, rent, and school expenses. Each woman is provided with three loans and by the end of the third loan cycle, most women have accumulated enough capital and experience to run successful businesses to ensure a regular source of income. Given below are a few metrics that illustrate the impact of our loans program:
- Diet and Health: The diet of all families improves significantly after a few months on the program. Most women report that they can afford 2-3 meals a day, as opposed to a single meal before they started their businesses. Better nutrition leads to improved health of the children, all of which results in increased school attendance and performance.
- Household Purchases: Most women are able to purchase household items like TVs, pots and pans, and toys for their children.
- Education: Earnings from businesses help pay for school expenses (i.e. books, school bags, shoes, and uniforms). In addition, loan recipients learn the importance of keeping children in school and are motivated to work hard to provide continuous education for their children.
- Savings: The women start saving a small amount each week. Before joining this program, most women did not have any savings and less than 5% were saving via bank accounts. After a few months on the program most women have learnt to save a small amount each week and about 40% start savings bank accounts.
- Improved Location of Business: As the women progress successfully through loan cycles, they may move from selling from their homes to renting a shop in marketplaces with higher foot traffic.
- Capital Acquisition: Many women are able to increase their capital; this helps to sustain their business even after they have been weaned off the program.
- Business Expansion: Most women are able to expand their business by increasing the variety of merchandise they can offer.
- Role Models: Women become role models by sharing their knowledge with others in the community. In addition, several men play supporting roles by assisting their wives in running the business.
- Prevention of HIV: As a result of discussions during weekly meetings, women have increased knowledge about HIV prevention and care. After a few months many women come forward for testing for HIV which is the first step toward HIV prevention and spread.
Overall, loan recipients are happier and look forward to a bright future due to improved health of their families, children attending school, and economic and social empowerment. Unlike a commercial loan program, the success of this program is not based on repayments, but on concrete proof that the recipients’ lives are being improved. For stories of a few first time entreprenures click here.
To learn more about the impact of our loans program over the last four years see below:
Power of Love’s micro loans program was launched in 2005 as a response to the devastation caused HIV and AIDS in Zambia. Most women in our program care for HIV positive family members and orphaned children and are themselves vulnerable to poverty and sickness. If they are provided with the ability generate income, they can support themselves while providing care that is essential in the community response to HIV and AIDS.
How does this program work? The first step is the identification of women who can benefit from this program. Beneficiaries are selected based on need, and their ability and willingness to run a business. Selected beneficiaries are required to particpate and complete a five-day business training. The business training includes modules on basic business theory, market investigation, purchasing and selling goods, and business promotion. On the last day of this training, participants are required to submit a simple business plan for their proposed business. After successfully completion of this training, the women are provided with their first loan. Loan recipients meet weekly to make repayments and discuss issues of concern such as challenges of running abusiness, caring for HIV+ children, HIV prevention, voluntary testing for HIV, the importance of keeping children in school etc. In addition, ongoing support is provided via business mentoring, refresher training, and regular field visits by the loan officer. As a result of this ongoing support, repayment rates are around 90%.
Loan capital is a revolving fund; once the women graduate (after receiving three loans), the same loan capital is available for a new set of women.
At this time we have 372 women running successful to moderately successful businesses. Direct beneficiaries are over 2,800 children and adults as each woman cares for seven people on average. Indirect beneficiaries are an additional 2000 people as the women share their knowledge with others and encourage them to work hard to support themselves.
Our goal for 2017 is to provide business training and new loans to an additional 100 women entrepreneurs. Please donate generously and give a gift of economic and social empowerment to women impacted by HIV and AIDS in Zambia.
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