We will provide small loans in 5 villages to help women beneficiaries establish or expand small businesses. After the initial funds are invested twice, assuming a repayment rate of at least 95%, the beneficiaries will qualify for additional installments until the permanent loan pool reaches full capacity and the fund will revolve in the community. We will include 300 women entrepreneurs in this project.
Marginalized women micro-entrepreneurs, particularly in poor communities, often have no source for the loans they need to expand their businesses other than daily lenders who sometimes charge up to 10% interest per month or even higher. Traditional lenders typically require collateral and are not interested in micro-loans. Businesses on the lowest rung of the economic ladder have very few sources for small, low interest loans.
We will provide initial loans to clients already known to our organization who have experience in the business for which they seek a loan. These clients already have a trust relationship with us which makes these small loans a good credit risk. Before receiving a loan, borrowers will learn that their compliance with the loan repayment terms will help to build a permanent loan resource for their community. The initial fund will then revolve and expand in the community.
Our investment is expected to fund short-term micro-loans which will be a first step towards building a sustainable loan pool sufficient to meet micro-loan needs of the community. Successful loan recipients will be invited to help mentor new borrowers and assist with administration of the program thus creating a sense of ownership and facilitating sustainability.
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