How the Microfinance Connection Works

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Training through the local church. Loans through a Village Bank.
 
Training through the local church

People in under-resourced communities are often living in extreme poverty, without access to financial services. Through the Microfinance Connection, United Methodist churches in many such communities are providing basic financial literacy and business development training, conducted by experienced mission personnel.

Residents who complete the training and are able to create a business then have an opportunity to join a Village Bank, and apply to become approved for a loan.

Loans through a Village Bank

The United Methodist Church has partnered with the Foundation for International Community Assistance (FINCA), a non-profit agency, to support the efforts of self-employed entrepreneurs through Village Banking, making small loans available to help start or expand their businesses.

Village Banks are groups of 5-20 members — usually women — who want to work, want to achieve and want better lives for their families. Through donations, these entrepreneurs receive small loans, sometimes as low as $50, to start or expand a small business. Village Bank members support and encourage each other at weekly meetings.

A loan recipient will invest the money in a business. She mIght buy a sewing machine to make clothes, or pots and pans so she can sell food in the market, or a herd of goats. When the business generates profits, she can pay for food, clothing and shelter for her family and send her children to school—the best way for them to improve their living conditions.

Village Bank members trust each other to pay back the loans, usually in 16-week installments. When the loan is repaid, the member can receive another loan to further expand her business. Best of all, each time a loan is repaid, the capital is used to make more loans to improve the lives of more families.

Your donation helps more than just one person

As loans are repaid, the repaid funds are re-deployed as loans to other future entrepreneurs, so they, too, can take the first step toward a better life.