Frequently Asked Questions

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Have a question? Wondering how the Microfinance Connection works?
Read below for full details.
 
Microfinance is loaning small amounts of capital to low income entrepreneurs struggling to escape poverty.

We believe that microloans, especially when accompanied by the training classes and accountability groups developed and presented by the United Methodist Mission Collaborative and FINCA’s Village Bank strategy, can help borrowers develop sustainable businesses. We think that our approach to microcredit transforms lives and helps build stronger families and communities.

The subject of microfinance is both broad and deep. If you wish to study more, Wikipedia.org articles like Microfinance and The Impact of Microcredit will link you to useful articles, resources, and information.

As Christians, we are called by Jesus Christ to love and serve the poor. Traditionally the Church has provided benevolence assistance to the poor, offering critical food, shelter and medical services. These are important responses to Jesus’ command.

But what could we do to assist these self-employed poor in their efforts to build up their own lives? The United Methodist Microfinance Connection exists to help you act on that challenge: offering an opportunity for you to fund a business-building investment and support a non-profit network that provides financial services to the poor.

At present (5/16), we operate in Mexico and Malawi but have plans to expand. FINCA currently operates in 23 countries around the world.
The United Methodist Microfinance Connection makes it easy for individuals to support life-changing small loans for low income entrepreneurs struggling to escape poverty. It works in just four easy steps:

1. Choose an entrepreneur — The Projects page profiles many qualified borrowers and the loan amount that will help each one achieve a set goal. Select a borrower and project to support according your own criteria such as country, gender, or type of business.

2. Make a donation — Complete your donation on the secure Microfinance Connection website. Your contribution will be sent to the local FINCA subsidiary where the small business owner you supported is a client.

3. Change a life — Borrowers use their small loans to start, or expand their businesses. Repaid loans become available for a subsequent loan to the same borrower or to another borrower in need, rotating perpetually through FINCA’s system as part of its pool of capital available to borrowers. Your donation becomes part of the loan capital of the FINCA subsidiary in that country and can then be lent to another borrower in need, and then another one, in perpetuity.

4. Repeat — Your donation provides a hand up, not a handout, to a hardworking small business owner in the developing world, and helps the United Methodist Church and FINCA alleviate poverty one person, one family and one community at a time.

We’re confident that once you’ve experienced the joy of supporting a Microfinance Connection entrepreneur, you’ll want to do it again. We’ll keep you posted on the funding status and loan repayment of borrowers you have supported. And, you’ll want to join a Group to encourage others to do the same.

Yes. Training is key to making sure borrowers have the best possible likelihood of success in their businesses. Attending the required training classes before acquiring a loan helps the borrower build a sense of responsibility, strengthens the local community, and spreads the word about the mission of the United Methodist Microfinance Connection.

Read more about the UMMfC’s Business Skills Training courses.

Yes. Like all microfinance organizations, FINCA charges interest on loans in order to cover the cost of providing the service, and to make sure that the loan capital you donate does not diminish over time.

Actual interest rates vary and reflect a variety of factors such as the local costs of borrowing. See our lending partner FINCA’s FAQ about interest and microloans.

Your donation is forwarded to FINCA (FINCA International, Inc., a registered charity headquartered in Washington, D.C.). FINCA International in turn sends the money to the FINCA subsidiary in the country where your borrower is located.
The average size of a FINCA loan varies per country. But, across Africa in 2013 for example, the average Village Bank loan was around $400. Most loans are successfully repaid by the borrower, and the loan repayment rate averages over 90%. (See FINCA’s 2013 Annual Report; .pdf format.)
To many microentrepreneurs in the developing world, $50 is a fortune. They can invest that money to make their labor far more productive. They might buy a used sewing machine to make dresses faster than sewing by hand. They might invest in a used refrigerator to keep the food they sell from going bad overnight. They might buy weaving thread in bulk at wholesale prices to increase their profit margin on every item.

Economist Milton Friedman once said that “the poor stay poor, not because they’re lazy, but because they have no access to capital.” The United Methodist Microfinance Connection and FINCA provide them with capital to help them break out of poverty, and provide them with the knowledge and confidence that can help real families and real communities succeed.

The United Methodist Microfinance Connection will contact you to thank you for your donation, and send you a receipt via email. You will become part of the United Methodist Microfinance Connection network and will receive regular communication regarding our work and the positive effects your donation is having on families.

When the loan you have sponsored is repaid, your donation becomes part of the larger pool of loan capital available to other borrowers in that country, funding additional loans through FINCA’s system in perpetuity.

Yes. This web site and the ministries it supports are overseen by the United Methodist Mission Collaborative, Inc. (UMMC), a registered 501(c)(3) tax-exempt organization.

Your donations to UMMC are tax-deductible to the extent provided by law. Your personal account’s donation history will always link to a downloadable receipt for each donation.

When you donate to The United Methodist Microfinance Connection, you acknowledge that:

  • The UMMC is a Kansas nonprofit corporation with registered 501(c)(3) status.
  • The UMMC did not provide any goods or services to you, in consideration, in whole or in part, for your donation, other than the provision of intangible religious benefits.
  • Your donation to The UMMC becomes the property of The UMMC, and The UMMC has ultimate control, authority and discretion with regard to contributions it receives.
Yes. The United Methodist Microfinance Connection values everyone as God’s children. We feel called by Jesus Christ to love and serve the poor and feel microfinance is one of the best means of meeting that call and bringing hope to the very poorest among us.

However, you don’t have to be a Christian or belong to a church to open an account. Life-transforming change happens when your donation makes microloans available to entrepreneurs – no matter what you believe.

Yes. The United Methodist Microfinance Connection is the result of contributions from numerous Sponsor organizations, and we feature their organization logos on pages of the web site.

See the Sponsor Organizations page for more about becoming a Sponsor, or contact us with your questions.

2016 Microfinance brochure - assisting lives through microloansThe United Methodist Microfinance Connection is committed to helping you spread the word about how microfinance strategies are changing the lives of families around the world.

Here’s 2 great ways to spread the word about this significant ministry:

  • download and print the 2016 Promo Brochure
  • share the Microfinance Connection’s About Us video

You can watch the 3-min. video in the frame below – and download or share via your social media or email by selecting the Arrow icon (upper right in the frame = youtube download arrow).

About Us Video (approx. 3 min.)

Your donation from the UMMfC web site goes entirely to FINCA so the loan capital pool in the country of your borrower can be replenished. FINCA does allocate a small percentage of funds to administrative overhead.

But, we also humbly encourage you to contribute to UMMC to support the costs of administering this web site, and the costs of our training and missionary efforts. See the Ways To Give page for your chance to make a real difference with your contribution.

We created the prototype Microfinance Connection in 2012, and began collecting funding for projects.

In Q3 2016, we completed a site redesign and redeployment that included a new donations processing method to replace the old method. Because we upgraded technologies, the methods aren’t compatible. So, a legacy project might be partially funded but not present the details of its donors.

Thanks for your support of the entrepreneurs and projects on the Microfinance Connection.

Yes. The United Methodist Microfinance Connection is committed to maintaining open and regular communication with all our donors.
Yes. In rare circumstances, many donors might fund the same loan at about the same time. As soon as a loan reaches fully-funded status, that loan quickly retires from the site’s projects list. But, if you do happen to see a fully-funded loan or an over-funded one, that’s good. Those donations move into the loan capital pool that funds other borrowers.
FINCA staff in each country select qualified borrowers to appear on the website.
Yes. We encourage every Donor to form an active two-way relationship with The United Methodist Microfinance Connection and to donate funds to additional borrowers on the website. An entrepreneur is likely to feel successful after fully repaying a project loan, and may quickly apply for another loan. When you and members of your group search the All Projects list and find more projects and borrowers to support, you are truly making a difference in their lives.
One of the best ways to spread the message of the UMMC and its mission is by buying Gift Cards.

When you purchase a Gift Card, your donation arrives into the general donation pool for loans. You’ll designate a Recipient for your Gift Card, and we’ll notify them by email. The Recipient chooses which Project the donation funds arrive to. In this way, you are encouraging him to open an account and fund loans to entrepreneurs, and to spread the word about the Microfinance Connection by sending Gift Cards to others.

You can purchase one Gift Card or many – and when you send Gift Cards to yourself, you can print them and hand to a friend. Perfect for a holiday present or as a donation item to a charity event.

Absolutely. Your information is safely and securely encrypted by a third-party financial institution that processes the credit card transactions. Note that your browser displays the SSL (secure sockets layer) indicator. Read more about SSL.

Do your part by helping with the Microfinance Connection.