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Effect International- Building Schools in India

5/15/2012

17 Comments

 
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By Kristen Winterton

Perhaps one of the most difficult aspects of micro-finance is in finding funding.  Many different avenues exist for funding, through venture capital funding, angel investors, friends and family, or by using your networks.  Correct utilization of networking can be an excellent source of finding funding.

One example of utilizing a network is Effect International.  The students who started Effect International are alumni of Utah State University, and are utilizing the friendships and connections made there to make a difference in the world as a whole.  Over the course of the last year, the Huntsman Scholars in the School of Business at Utah State University have worked with Effect International to raise money to build a school in India. 

This school will be located in the village of Kuan, Madhya Pradesh, India, and is the second school to be built by Effect International.  The first school is established and is already serving 120 students, with plans to expand.  It seems that there is always more need for education, and the individuals working with Effect International are trying to meet the growing needs.

The location of the school in Kuan is very strategic, as it is a central location for several communities, and will allow students from many villages to attend school.  These children currently have very little opportunity for schooling, as the system is very corrupt, and teachers don’t even bother showing up to teach.  Effect International works with the communities to build the school, hire teachers, and oversee the operations to ensure that children are educated properly.

In order for Effect International to have the funds to build and operate the schools, they reached out to their established network at Utah State University.  One of the co-founders of Effect International is an alumnus of the Huntsman Scholars Program, so current students in the program reached out to help.  They set up craft fairs, a princess party, bake sales, developed partnerships with restaurants to receive a portion of proceeds, and created small businesses to raise the money necessary to build the school.

The craft fair was an expo of several businesses, many with international ties, who set up booths in a large center, allowing community members to have a central location to see what the community had to offer.  These businesses provided everything from homemade jewelry to belt buckles made from caribao (an animal native to the Philippines) to notebooks with paintings, photographs, and drawings made by novice artists from around the world.

The princess party was an event held for young girls which provided an opportunity for them to dress up as a princess and go to get their hair and nails done, story time, dancing, and encouragement for them to fulfill their dreams.  The group had the girls write down their dreams on a slip of paper, and the group then developed a dream tree, as seen in the picture, with all of the dreams hung on the limbs of the trees.  The community responded positively, and the event was a great success.

Many small businesses were created, such as a window-washing business, bake sales, and a partnership with local restaurants which allowed the students to advertise attendance at a restaurant in favor of the group raising money for Effect International as a portion of profits.

By reaching out to their network, thousands of dollars of funding was raised for Effect International.  Likewise, think of the connections that you may have as you try to find funding.  Consider what resources you may have at your disposal which can help you achieve your purpose. CREED is currently raising capital to fund micro enterprises loans in Belize. Click on one of the links to donate.

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Micro-Business in Belize

11/2/2010

1 Comment

 
Wendell Brock - Tuesday, November 02, 2010
By Jayme Mendenhall

The Word at Work non-profit in Belize is putting together a small scale sewing business. This non profit is teaching ladies how to sew and then providing the funds for them to purchase a sewing machine on credit, to help get their micro business established.  They are also looking for some investment dollars that they can lend to the ladies to help purchase the machines.  CREED is working to establish a fund that would provide the money for their growing micro-business lending project in Belize.

Pedro Perez, a Business Development Manager, at Atlantic Bank, Ltd. a local bank in Belize, is leading this project.  “My initial focus is serving those who are currently ‘unbankable minitrepreneurs’ within the $400.00 range. It is my hope that with training, monitoring and support these could graduate into micro, and small projects.  My main focus is to increase their capacity and skills to do business generally.  We also saw that these trained persons needed the financial and business skills to be fully successful, hence our initial interest in Micro Enterprise development.”

The idea is new for Belize and they are open to play it by ear and adopt the best practices.  The target market is single mothers and young women and men who are unable to continue their formal education. Pedro and his wife have been partnering with The Word at Work for sometime and they currently manage one of the sewing programs in Belize. There are three in Belize City, one in Corozal, and the Word at Work is hoping to start another at Holy Cross in San Pedro.  So far they have trained many singles and mothers and sold them sewing machines to start a new life. Their immediate goal for this sewing project is: 20 single mothers at Centro, 25 at House of Refuge, and 8 in Corozal.
  
CREED is initially creating a $5,000.00 revolving fund for the initial pilot project.  They have developed a complete framework for this program and they are working on developing the training material both in Spanish and English to implement with 3 of their local partners: Centro Vision Misionero, House of Refuge and Living Hopes Ministry Preparatory School. 

The loans to help start the micro businesses are a maximum of Bze$ 400.00, but they have the flexibility of going above and below this amount.  The total charges for the loan, including interest, registration and support and monitoring fees, are $100.00. The recipients are then given 5 months to pay with a grace of one month (six months). This makes the $25.00 weekly payments affordable.

There are some requirements the recipients must meet; they must take the training, develop a business plan, start saving, accept the monitoring and coaching and pay back on time.  There is a committee that evaluates the business plans and decisions are based on:

Character
Viability and need of project
Capacity to pay back
 How it is going to impact the member and their family
 References from the Pastor and others in the church they attend

We invite you to participate in this project as we press forward to improve the lives of families, simply click Here, then click on the "Just Give Button"  
Thank you very much for your support.

1 Comment

Micro Finance, Macro Changes

2/12/2010

4 Comments

 
Wendell Brock - Friday, February 12, 2010

When Mohammed Yunus and Grameen Bank won a Nobel Peace Prize in 2006, micro lending became a household term. Yunus had been giving micro credit for decades, though, making his first loan to Bangladeshi basket weavers in 1974.

The United Nations beat the Nobel Prize committee to the issue by a year, designating 2005 the InternationalYear of Microcredit.

But for any global issue, one year is hardly enough.

The Year of Microcredit’s website says, “The Year will be successful if 2005 is considered one pivotal chapter in the promotion and development of inclusive financial sectors. Considerable follow-up at all levels after the close of the Year will help sustain the momentum achieved by the Year observance.”

While we must have reasonable expectations, the momentum’s still here in 2010. A quick Google search finds that, just this year, micro credit companies have popped up in Kyrgyzstan, the Philippines, and Indonesia. As well as in the United States, there are several micro finance companies - many are operated as non-profits, likeAccion Texas and the PLAN Fund.

Micro Lending Primer
While terms vary, there are a few guidelines that most lenders follow
  • Loans are based on trust rather than collateral
  • Loans are paid back in very frequent installments
  • Borrowers must join a borrowers’ group for support, advice, and accountability
  • Micro lending helps people help themselves.
First-responder Lending
A current Newsweek article sheds light on Fonkoze, Haiti’s largest micro financier. Not only does it assist people in ordinary times, but it is also making disaster-specific loans following the January 12 earthquake.

While Haiti’s traditional banks were (and still are) in ruins, Fonkoze began lending money two weeks after the earthquake.

Because micro finance units know the specific needs of their customers—this is how they do business, with small loans to individuals—they’re better equipped to handle disasters that hit their customers. The Newsweek article asks, “Could microcredit be the new Red Cross?” While it can’t completely replace disaster aid, it can play a part.

“Chemen Lavi Miyo”
Fonkoze’s primary program—which means “the Road to a Better Life”—is micro lending in non-disaster times. A video on their website tells the stories of several women who’ve received micro loans.

A mother of four children says that, before Fonkoze’s loan, “I didn’t even have a chicken. Now I have 18 ducks and chickens and eight goats. I have standing in this community. … For the first time in my life, I have the resources and knowledge to grow food and earn money.”

Micro financing has done much to help the poor improve their lives, but much more still needs to be done.

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