This program is a convenient and easy financing mechanism to empower those with no capital.
We work with local organizations in order to form partnerships for achieving the program’s goal.
Aimed at improving schools infrastructure.In Eastern DR Congo most schools are in very poor conditions.About Microfinance
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What is microfinance: In its simplest form, microfinance provides basic financial services, such as credit and deposit-taking to historically marginalized populations that do not meet the criteria to do business with conventional banking institutions. This covers people whose lack of access to collateral means they cannot qualify for credit, and includes the world’s poor, who number over one billion and who live on less than $1.25 per day. Microfinance encourages economic stability through income generation rather than subsidies.
What is Microcredit: Another name for a micro-loan. A part of the field of microfinance, microcredit is the provision of credit services to low-income entrepreneurs.
What is In-Kind (Micro) loan: Instead of small loans in cash (Cash Loan), some organizations provide loans in kind. These can be – agricultural inputs like seeds and fertilizer-to farmers who repay the loans with a part of their harvests or in cash after selling their produce. It can also be any items (clothing, shoes, food items, etc) to be monetized by the borrowers who repay in cash after selling.
Pro-Microfinance provides In-kind loans of mostly used clothing to women and men organized in solidarity group of five to ten people. Beneficiaries sell these products in their communities. They use the sales proceeds to re-pay the loan in cash to the organization and keep the profit for themselves in order to cover their families’ basic needs and also save part of it their saving account with PMI to build up capital for them to invest in a business of their choice in the future.
Glossary of Terms
Collateral:Asset pledged by a borrower to secure a loan, which can be repossessed in the case of default. In a microfinance context, collateral can vary from fixed assets (a bicycle, a sewing machine, etc.) to cross-guarantees from peers.
Group Lending: Lending mechanism which allows a group of individuals – often called a solidarity group – to provide collateral or loan guarantee through a group repayment pledge. The incentive to repay the loan is based on peer pressure – if one group member defaults, the other group members make up the payment amount.
Individual Lending: Single-client lending where repayment relies solely on the individual.
Microentrepreneur: Microentrepreneurs are people who own small-scale businesses that are known as microenterprises.
Microenterprise: A small-scale business in the informal sector. Microenterprises employ fewer than 5 people and can be based out of the home. Microenterprise is often the sole source of family income but can also act as a supplement to other forms of income. Examples of microenterprises include small retail kiosks, sewing workshops, carpentry shops and market stalls.
Microfinance: The practice of providing financial services in very small increments to the working poor.
Microfinance Institution: Also called MFI. An institution that provides financial services to the world’s poor. A financial institution can be a nonprofit organization, regulated financial institution or commercial bank that provides microfinance products and services to low-income clients.
Microinsurance: A system by which people, businesses and other organizations make payments to share risk. Access to insurance enables entrepreneurs to concentrate more on growing their businesses while mitigating other risks affecting property, health or the ability to work.
Microsavings: Savings in very small increments, frequently starting with just 1 USD and followed with very small deposits.
Remittance: Transfers of funds from people in one place to people in another, usually across borders to family and friends. Compared with other sources of money that can fluctuate depending on the political or economic climate, remittances are a relatively steady source of funds.
Self Help Groups: Also called savings groups. SHG are groups composed of about five to 20 members, with regular meetings in member’s homes. At each meeting all members save the same amount. The groups then lend these savings to members, store them in a lockbox, or deposit them in a group bank account in order to leverage a group loan. If an emergency strikes, members often can access a loan quickly from their group’s emergency fund. Savings groups provide limited but highly convenient services to large numbers of small, rural depositors.
Stepped Lending: The process by which borrowers who repay loans on time are eligible for increasingly larger loans. Stepped lending keeps initial risk at a minimum while allowing microentrepreneurs to grow their businesses and increase their incomes.
Sustainability: An organization’s ability to cover costs. There are varying degrees of sustainability, ranging from not sustainable to financially sustainable.
Village Banking: Lending methodology in which clients – typically women – form groups of approximately 10-30 individuals that are autonomously responsible for leadership, bylaws, bookkeeping, fund management and loan supervision. The group pools funds to use for business loans, savings, and mutual support, and members cross-guarantee individual loans.
