Christmas for Entrepreneurs Around the World

In Kishasa they sing through the night. In Mexico City, the streets and houses are adorned with bright red flowers that brings luck year round. In Russia, where snow is practically guaranteed, they swap presents at New Year and don’t celebrate Christmas until a week later. So how (indeed if at all) do lendwithcare entrepreneurs celebrate Christmas and how does it affect their businesses? We asked our MFIs exactly this. 

Microcredit and Job Creation

© CARE/ Emilie Bailey

When the aim is to create jobs then what is more effective, lending to the very smallest businesses, often referred to as microenterprises, or lending to slightly larger businesses commonly called Small and Medium Enterprises (SMEs). This was the question addressed by an interesting workshop that I attended recently on the relationship between microcredit and job creation at the Microcredit Summit in Valladolid, Spain. I am not sure that we reached any sort of agreement, apart from the obvious that both are important.

Alastair Stewart OBE report from Bosnia

Bosnia and micro-finance

A weekend in Bosnia with one of the charities I support:



© CARE/ Jon Spaull

The day before I left for Bosnia-Herzegovina I had been grilling MPs in London about the Autumn Statement, the UK’s public spending crisis and the Coalition’s austerity package. Here, unemployment is 40% and the state levies an effective 70% jobs tax – it is the economics of the mad-house. Widows of the civil war, particularly the genocide of Srebrenica, literally scrape a living from the cold soil. Buildings, twenty years on, still bear the pot-mark battle-scares of shelling while others remain empty wrecks- crumbling monuments to lives lost, people disappeared.

CARE International UK Chief Executive reports from Bosnia Herzegovina

 


© CARE/Jon Spaull

  CARE UK Chief Executive Geoffrey Dennis writes from Bosnia and Herzegovina where he is with ITN’s Alastair Stewart visiting the latest entrepreneurs to be added to Lendwithcare.

Landing in Sarajevo 19 years after I was last here during the war, I was quite surprised to see a lot of buildings and infrastructure are still in the same poor condition as they were then, some exactly as I last saw them. We travelled to Srebrenica early this morning, which economically and physically appears to still be in a very bad way. Buildings still bear bullet marks from the conflict. The economy of Bosnia and Herzegovina has slowed down considerably, particularly since 2008, and as a result approximately 40 per cent of working age people are unemployed.

What happens with loan repayments when a natural disaster occurs?

© CARE/Ami Vitale

I am currently in Cambodia where months of heavy rainfall have resulted in the worst flooding in a decade. This has left at least 247 people dead and damaged more than 390,000 hectares of agricultural land, including more than 10% of the country’s rice harvest. The floods have affected 1.2 million people across the country, but particularly those living along the Mekong River. Around 34,000 households have been evacuated to higher ground, and many roads, schools and homes have suffered damage.

Since early 2011 lendwithcare has been partnering with a local microfinance organisation, Cambodia Community Savings Federation (CCSF), which provides loans and other financial services to microentrepreneurs in the north-western provinces of Battambang and Banteay Meanchey, near the border with Thailand. While not as badly affected as other parts of Cambodia, many villages in the province remain isolated and under water. In some parts, cattle have been put in pens on small man made islands of earth, surrounded by flood waters. Many farmers have lost their entire rice crop as their farms have turned into lakes. In these situations, what happens to loan repayments?

 

Fair interest rates and ethical lending



© CARE/Emilie Bailey



There has been a lot written in recent months about the high interest rates charged by certain microfinance providers. Thankfully, such instances are still relatively rare. Lendwithcare only partners with those microfinance institutions (MFIs) that charge ‘fair’ interest rates, but we go further and also promote an ethical lending policy. This process starts by selecting MFIs that comply with a set of eligibility criteria. Although solid financial performance is among the requirements, paramount importance is given to a strong social development mission including targeting low-income populations who are usually excluded by commercial banks. We check at least once every six months to ensure that partner MFIs continue to meet criteria. CARE also maintains a presence on the Board of some of the MFIs to ensure that social development objectives remain at the fore in institutional decision making.

How do entrepreneurs use microfinance?



© CARE/Emilie Bailey



I am always interested to learn more about how people use microfinance. During a visit last month to the Philippines I had several opportunities to speak directly with entrepreneurs. Lendwithcare works in partnership with SEEDFINANCE, a local wholesale microfinance institution (MFI) in the Philippines. This means that it lends to other smaller MFIs. Among these are the First Consolidated Co-operative Along the Tañon Seaboard (FCCT) and Lamac Multi-Purpose Co-operative (Lamac), both of whom have entrepreneurs featured on lendwithcare. FCCT and Lamac are from the island of Cebu, which is a one hour flight southeast from the capital Manila. The island’s commercial and administrative centre is Cebu City, the oldest city in the Philippines.

Promoting responsible lending

© CARE/Helen Barnes

I listened to a very interesting and well balanced programme on BBC Radio 4 last week called ‘The Bankers and the Bottom Billion’ about microfinance in India (http://www.bbc.co.uk/programmes/b0112fz9). It illustrated the potential of microfinance in helping poor people to develop their businesses and improve the lives of their families. However, it also highlighted the problems associated with poor people taking out multiple loans and not investing the money in productive ventures. It went on to describe situations where some borrowers, who were unable to generate a return and repay their loans on time, were being chased by ‘microfinance companies’ whose main concern was making a return for their shareholders.Could this also happen to the entrepreneurs supported through lendwithcare?