The Right Type of Microfinance

Nyangu Sakala, who was supported by a loan from Lendwithcare

In recent years there’s been a steady stream of media articles questioning the benefits of microfinance, with some critics even arguing that not only does microfinance not benefit the poor, it actually makes them poorer. How should those of us involved in supporting the access of poor people to financial services respond? Is what we are doing actually helping the poor? Is the criticism of microfinance justified? Here are some personal thoughts.

Crowdfunding: A Cure to the World's Social Problems?

This blog was written by Lendwithcare lender, Jan Tchamani, and originally posted on DuCredit's website. It has been re-posted here with permission.

 

The Chitimba Women's Group, supported by Jan through Lendwithcare

Crowdfunding activity has been on the rise for a few years. With the rise of Kickstarter and other platforms, no sector benefits more fruitfully from crowd funding initiatives than the 3rd sector.

Micro-finance initiatives allow anyone to invest small amounts of money which make a huge difference to entrepreneurs and workers in the third world. Allowing them to provide a sustainable future for their families.

We asked one UK based donor, Jan Tchamani, one of AgeUK’s current internet champions, why she chose to give through crowdfunding and tell us a little about her experience of charitable giving through LendWithCare.

Promoting solar power in Pakistan

The city of Lahore is renowned as the literary, educational and cultural heart of Pakistan and has a long history of beautiful architecture dating in particular from the Mughal period with buildings such as the Badshahi Masjid and the Shahi Qila or Lahore Fort.

Shakeel and Rehan from Akhuwat on the roof  where the solar panels are located

How to increase investment in micro-enterprises (and get your money back)

This blog was orginally posted on CARE Insights.

Today CARE has submitted written evidence to the International Development Committee (IDC) of the House of Commons on our peer-to-peer lending network, Lendwithcare. (For a snappier and more entertaining overview of Lendwithcare, see our new Christmas animation above.) The IDC is currently looking at jobs and livelihoods and is interested to understand more about the role that a relatively new way of funding micro-enterprises can play in generating growth and jobs in developing countries.

Is peer-to-peer (P2P) lending an efficient way to support microfinance?

The Lendwithcare.org Homepage

Peer-to-peer (P2P) micro-lending platforms, such as lendwithcare, have become a popular method of supporting small businesses in developing countries. Local microfinance institutions (MFIs) select borrowers and appraise their loan applications, which if approved, are financed by the P2P platform. Lendwithcare was established in 2010 and to date some 17,000 individual lenders have financed loans to more than 8,000 borrowers across ten countries.  Our experience over the past four years is that as their loans are repaid, lenders invariably re-lend; rather than withdraw their money. While lendwithcare has proven to be very popular with supporters, is it an efficient way for MFIs to access funding?

Video updates from Togo part three: “A small loan is like oil in an engine; it allows people to move forward"

Finally, part three of Tracey's video updates from her April 2013 trip to Togo is here! Here are also parts one and two for some context.

To round off my blog/video updates from Togo, I wanted to share with you some lasting impressions from the trip.

The passion and commitment of the WAGES staff

Many of the office staff began their careers as Loan Officers, including the General Manager, Ramanou Nassirou who, when talking about the entrepreneurs said “most of them know how to run their business, we just provide them with a small loan to get them started - a small and affordable loan is like oil in a car engine; it allows people to move forward". 

I have already written about how WAGES supported clients who lost everything in the massive fires which swept through the great markets of Lomé and Kara last year and this demonstrates further the commitment that WAGES have to improving the lives of their clients. 

Day 2 – Safely arrived in the Philippines

Day Two

Arrived safely after a 19 hour journey. Catching up with the CARE office tomorrow then meeting @lendwithcare partner next day.
— Tracey (@traceymohabir) January 13, 2014

Head of Lendwithcare, Tracey Horner, safely arrived in Manila this morning where she will stay for a couple of days and meet with CARE Philippines staff to discuss a rehabilitation plan for the people who lost their livelihoods when Typhoon Haiyan hit on November 8^th last year. One of the main questions to be addressed is how Lendwithcare, a peer-to-peer lending platform operating in devastated areas, can contribute to these rebuilding efforts.

Best wishes for 2014 and a massive “Thank you” for your support to lendwithcare

2013 was a busy and at times a challenging year for lendwithcare. It was also a hugely successful one thanks to your continuing support. 

Video updates from Togo part two: collecting updates from the field

After the first part of our video updates from Togo in July, the wait is finally over! Here is part two, at last.

In my first blog about my trip to Togo, I mentioned that visiting our microfinance partner, WAGES, was of particular interest to me because of CARE’s long-standing relationship with the institution. However, the main purpose of my trip was to respond to our lenders’ desire for more updates on how their loans have impacted on the lives of the people they have supported.  So I travelled to WAGES to provide the loan officers who work with Lendwithcare some further training on how to provide updates and more specifically how they can use film to bring these updates to life.

The training was led by professional film makers Fiona Molloy and Nik Wood (the people that also put together our fab TV ad!) and I have to say the loan officers really enjoyed learning the tricks of the trade from Fiona and Nik.  They particularly enjoyed learning how shooting different kinds of footage rather than simply zooming in and out can improve a film.

These three women had specific messages they wanted to pass on to the Lendwithcare lenders:

How financial literacy can help build the market for microinsurance

by Alexa Roscoe, Private Sector Advisor, CARE International UK

© CARE/Helen Barnes

CARE International promotes microinsurance as part of the range of services and products that the poor need to help overcome poverty and reduce their vulnerability to shocks. However, we also know that as with all products, to be sustainable, any microinsurance model also needs to be profitable. Fortunately for the insurance industry and its clients, it’s being demonstrated that increasing profit and promoting financial inclusion do not have to be mutually exclusive. New research from our work in India shows that microinsurance distribution strategies that prioritize building clients’ financial literacy lead to almost three times as many new enrollments as those that do not.

To read Alexa's full blog please visit the Centre for Financial Inclusion. 

Making loans & changing lives for three years

Three years ago CARE International UK launched its innovative peer-to-peer lending platform, lendwithcare.org with the aim of helping people in developing countries work their own way out of poverty and to promote financial inclusion among low-income sectors of the population. Through the lendwithcare website, lenders can make small loans to entrepreneurs in developing countries to help them start or expand a small business.  

Since launch and with the fantastic support of The Co-operative (who put together and designed this infographic) and our wonderful lenders we are proud to say we have have achieved so much ...

We did it! £3m of lendwithcare loans to entrepreneurs in developing countries!

The past year has seen phenomenal growth at lendwithcare.org. At that stage we were celebrating £1m of loans made. In March this year we commemorated the doubling of that monumental amount! And I am thrilled to tell you that last week, on 30^th August 2013, we smashed through that and our 3 millionth pound was lent by Sharon from Suffolk to Mrs Essowouna Simbama from Togo! Thus far, lendwithcare lenders have:

•        Made over 80,000 loans
•         To fully fund over 5,000 entrepreneurs
•         From seven different developing countries

Making loans and transforming lives in Pakistan

Safiya and her husband, Khuda

Picture: © CARE

It is quite fitting that as the holiest month in the Muslim calendar, Ramadan, draws to a close this week and Muslims around the world celebrate the arrival of the new moon, we at lendwithcare.org will be celebrating the successful inclusion of our first Islamic Microfinance partner, Akhuwat in Pakistan.

Originally posted on the Department for International Development UK website, reposted here.

Bonjour Yovo (Good morning stranger): Notes from a visit to Benin

  Last week I went to Benin (1). I got out of the plane in Cotonou, the largest city in Benin, as a tropical storm was receding and I was greeted by warm wet air, the sight of palm trees, the wet red soil…. and by the mosquitoes.

 The following morning, the first people who said hello to me were school children. As I made my way past them they all chimed “Good morning, Yovo.” And then smiled at me, I felt I had been welcomed.                                                           

Video updates from Togo part one: providing small loans to the financially excluded

In April I travelled to Togo to visit WAGES, our local microfinance partner, and a number of the micro-entrepreneurs we have supported through lendwithcare.org.  It was a particularly interesting trip for me because when I first started working for CARE International back in 1997, the “Women & Associations for Gains both Economic and Social” (WAGES) project was in the process of moving away from its origins as a small-scale group lending programme set-up by CARE and was transforming into an independent Microfinance Institution (MFI). I remember how CARE’s end of project evaluation had concluded that the WAGES project  was having such a positive impact on the lives of poor women and in order to help the many more thousands of people who could benefit from micro-loans, WAGES should became an independent entity.  This is why when we set up our lendwithcare.org initiative in 2010, WAGES was an obvious choice to be one of our very first partners.

Why are some microfinance loans not so 'micro'?

When asked recently by a lender why many of the loans featured on the lendwithcare.org website were rather large (often around £1,000) we explained why that might be:


1. At lendwithcare we believe that supporting small to medium enterprises (SMEs) often generates waged employment opportunities for some of the very poorest segments of the population. The latter occasionally do not even qualify for a microloan in their own right. This strategy of supporting a range of businesses we believe is more effective in tackling poverty than simply supporting one type of business.

Following my donations

Jun Pérez, President of SEED Finance and Amy Lithgoe

It’s not often you get to know how the money you donate to charity is actually spent but today I was able to meet Jun Perez, President of SEED Finance, the Filipino partner of lendwithcare.org.  I’ve always thought the whole concept of lendwithcare.org is fantastic and was keen to find out more about how the scheme actually operates on the ground.

Living Below the Line | A photo diary

£1 for 5 days for all food and drink - could you?

For the past 3 days, 1000's of Britons have taken on the challenge to live on £1 a day for all food and drink in an attempt to deepen and widen understanding of the challenges and difficult choices faced by those living in extreme poverty.

We have been taking part in the challenge here at lendwithcare.org and as we enter into DAY FOUR I wanted to share a few of my (picture) thoughts from the challenge so far

This week I have learnt that living within an extremely tight budget means …

My Top 10 Tips to Live Below The Line

One week today the Live Below The Line challenge begins!!! 

 

And for those of you who are like me and slightly worried about whether you have the creativity and knowledge to eat adequately on just £1 a day. Or wonder how you are going to raise both awareness and funds for your chosen charity, I have compiled a list of TOP TEN TIPS to help you (and me) take on the challenge!

Rice production in Cambodia: the poor farmer’s perspective

Rice farming in Cambodia can be a tough and uncertain business. Rainfall is highly erratic, both drought and floods being regular occurrences, land is often infertile or under-nourished and investment in new farming systems and technology is minimal. 

Yet approximately 60% of the Cambodian population rely on agriculture (mainly rice production) for their livelihoods and unsurprisingly the vast majority of those are living on less than $1.25 a day. Despite government commitments to expand rice production and increase the country’s export capacity, the reality for the majority of farmers is stagnant growth and an uncertain future. Which is why, on a recent trip to Cambodia, I was keen to find out why so many of the entrepreneurs we have supported through lendwithcare.org are sticking to rice farming.