Lend with Care
Our club has been involved with Lend with Care since 2018 lending small amounts of money to individuals and small co-operatives, mainly women allowing them to be economically self sufficient.
Everything you need to know about Care International UK and their Lend With Care microloans can be found on the website
Who are Care International UK?
Care International UK have been an aid organisation for 70 years. In the last 20 years they have focussed on micro loans, particularly to women or groups of women in developing countries for whom traditionally no financial help has been available to assist them to work their way out of poverty, support their families and create further jobs. Microfinancing has been introduced in 10 countries they being, Pakistan, Philippines, Cambodia, Ecuador, Peru, Vietnam, Zambia, Malawi, Zimbabwe, Rwanda and The Occupied Territories of the West Bank and Gaza.
At present there are around 50,000 lenders – the vast majority are individuals, people with a social conscience who want to make a positive contribution to the wider developing world. There are also around 750 “lending teams” i.e. groups of people including 2 Rotary Districts and various schools.
In our District 1210 there are 36 clubs who have so far lent £144,765 to a total of 14,379 entrepreneurs – this has supported 46,509 family members and created 5,448 new jobs. The default rate is just 0.2% - amazing!
What is microfinance
Microfinance is usually aimed at the economically active poor and low-income people who have limited or no access to the services provided by formal financial intermediaries such as banks. Since there are so few salaried work opportunities, they are usually self employed microentrepreneurs often working from home. Typically, they operate small businesses such as grocery shops, market stalls, carpentry or other workshops. In rural areas they tend to focus on agriculture and raising livestock and poultry. Around two-thirds of microfinance clients worldwide are women. Microfinance is popular as it is seen as a long term and more sustainable approach to helping poor people improve their lives. Microfinance is not charity as the beneficiary repays the money. It focuses directly on helping poor people to work and become more self-sufficient.
The process of lending to an entrepreneur as described is as follows
- It starts with a business idea by the entrepreneur
E.g. opening a market stall, diversifying crops, buying a sewing machine, buying fertiliser etc
- The entrepreneur requests a loan
He / she / they approach a local MFI (Micro Finance Institution) that is a partner to Lendwithcare
If the business idea looks viable to the MFI they will be given the go ahead
The MFI will upload the entrepreneurs profile together with the business detail and loan requested on to the Lendwithcare website
- We lend to the entrepreneur some or all of the loan requested
There are many loans being sought – most are fully funded within days. Just a click on our account with Lendwithcare, they forward the money to the local MFI who in turn fund the entrepreneur
- The entrepreneur’s business grows
The entrepreneurs profile is regularly updated so that the lenders can see how the loan to the business is transforming the lives of the entrepreneurs in lifting them out of poverty
- The loan is repaid
The entrepreneur pays back the loan in instalments to the MFI – the average repayment schedule is 6 months – some are paid back in one or two instalments, others run to around 12 instalments.
The MFI transfers the payments to Care International who then credit the payment to the lenders account -us.
- Continuing Working Capital
Once the loan has been repaid into our Lendwithcare account, we can withdraw it if we wish – however as part of our International programme we would continue to make further loans. So, the money is recycled as continuous working capital.
As the loans are repaid with a certain amount of interest, then it is possible to grow our Lendwithcare account as Aldridge Rotary Club have done.
Care International UK depend on voluntary donations to fund their admin costs – there is a facility to make a donation to them or not through the Lendwithcare account. They do not take a cut out of the loan itself, 100% of the loan goes to the entrepreneur.
- Choosing an entrepreneur and reporting back to the club on the progress.
The selection of entrepreneurs can be made by a single Rotarian as International Officer or it can be switched around every few months to give every member over time a chance to operate our Lend with Care account. As loan requests tend to be met by lenders within a few days then it’s not possible to make recommendations to the club in a full meeting – but the Rotarian running the account can keep the club informed. Most of the loan sought are usually for less than £500 – although naturally a few are up to about £2,000 – and the business idea has already been checked out by the local MFI then we trust the judgement of the MFI.
Micro Finance Institutions, how can we trust them.
Care International UK expects all its partner MFIs to adopt and implement a code of conduct aimed at fostering transparency and protecting the entrepreneurs. The goal is to develop the capacity of MFIs to provide long term and sustainable financial and some non-financial services such as training to the poor. Care International conducts regular checks on its MFIs to ensure compliance to the code of conduct. The MFIs are staffed by humanitarian workers and in a sense, they are the local business managers making the recommendations as to the viability of the entrepreneur’s business ideas. The checks by Care International are necessary to ensure that lending criteria are properly administered. Care International have ended their working relationship with 3 MFIs in the past. Care International UK state “…we always undertake in-country due diligence field visits lasting 1-2 weeks to carefully examine the operational policies and procedures of MFIs and this includes discussions with both MFI staff and the local clients to whom loans have been made. Once a partnership is established we require partners (the MFI) to submit quarterly reporting data on a range of financial and social indicators and we undertake further in-country visits at least once every 12 months to ensure that the eligibility criteria continues to be met”.
Our club experience so far.
We opened our Lend with Care Account in 2018 with £300 being paid into the account
3 loans were made at the outset, each to a female entrepreneur in Zimbabwe – they all lived to the north of Harare in a rural area. Each has made their monthly repayments to us and were on course to fully repay the loans until the Zimbabwean government stopped all foreign currency transactions. Through no fault of the 3 ladies we have £12 owing to our account on these loans. Lend With Care have suspended their activities in Zimbabwe until the government policy changes.
We have made 2 further loans to female entrepreneurs in Malawi and 2 loans to female entrepreneurs in Peru.Being a Lendwithcare Ambassador
When I asked Gary, one of our volunteers, about his experiences of being an Ambassador,hereplied “ I have thoroughly enjoyed being an Ambassador. Of course, I always feel a little nervous before I start. But the audiences have always been really engaged and supportive.”
“It’s really easy being an Ambassador, and it doesn't take much time. Lendwithcare provided me with supporting literature. Together with the information on the website, I've been able to present to my audience. And if there’s anything specific I need to know, all I've got to do is ask the team"
If you would like to know more about being a volunteer Ambassador, then you can click on the link here. As Gary says "Being an Ambassador has helped me introduce Lendwithcare to a wider group of people, who always seem to come back to tell me what a great idea it is “.