I spent £100 this weekend on two dresses. I thought that was a pretty good deal as I bought them on ebay and both were my most utilitarian colour – navy. I'd probably never go shopping if every time I went to add my card details I remembered that our average first time loan size is around $150.
$150 to transform someone's life by helping them start or grow their business and $1000 in business loans to create nine jobs. If only the two billion people in the world lacking access to formal financial services could reach this funding.
In my travels with VisionFund I have seen mothers only able to provide maize for dinner, and while their children's bellies were 'full' there was not enough nutrition. I have seen women adopting orphaned children and then sleeping in what is little more than a bamboo tent. I have listened to widows worrying about how to afford school fees of $10 a month to give their children a better future.
In many developing countries, employment opportunities are much too few. Entrepreneurship is one of the few options available to families and they are incredibly resilient and creative in building businesses with minimal resources. Being able to bring a few baskets of tomatoes to market, sell fritters to passers by or produce handicrafts is often the differentiator between abject poverty and improved provision.
Now imagine if small business funding was linked to training and also to support for family members – such as sanitation facilities, better nutrition, access to education. Now we are starting to capture the potential to transform lives when microfinance is part of holistic support in communities.
Microfinance is the term given to financial services for low-income individuals and those without access to typical banking services. It is typically small loans, insurance services and village savings groups, that reach those with few financial options.
There are many commercial providers in the market, but not many working from a faith basis. Proverbs 22:9 explains this difference: "Whoever has a bountiful eye will be blessed, for he shares his bread with the poor."
This foundation steers our interactions with clients, the goals we have as an organisation and the way we work together as colleagues.
What we do is different for a couple of reasons. Firstly, we are ultimately aiming for the children of our borrowers to have a better life and measure our success on this basis. Secondly, we are providing integrated support with our parent, World Vision, the world's largest child development charity. And lastly, we tend to go where others don't want to go – to the rural areas that are most difficult to reach and to serve mainly women clients.
As microfinance enables women to grow their incomes, it helps them provide brighter futures for their children. Women and children in rural areas have particular needs that must be considered. For example, primary age children in rural areas are twice as likely to be out of school as children in urban areas of the same country.
Women spend 80 cents of every dollar earned on their families, including nutrition, education, medicine and housing. It is key that these earnings impact vulnerable, rural communities and especially the children within them.
This vulnerability is what encourages us to go deeper in the places most difficult to reach, to help the vulnerable with a hand up.
Proverbs 14:31 says, "Whoever oppresses a poor man insults his Maker, but he who is generous to the needy honors him."
Most of our clients have few possessions, they have not had a formal education and there is typically little paperwork to prove their ability to repay. While we have developed a number of ways to assess loan criteria around these challenges, it still requires faith. We believe that our clients want to provide a better life for their children, and given the means will work hard to do so.
There is good reason to 'not refuse the one who would borrow'. Our global loan repayment rate is 98.7% and last year we served 1.2m clients. Over 4.4m children benefitted from their parents' business success through us.
We have been asked "...to remember the poor, the very thing I was eager to do" in Galatians 2:10. Indeed, building financial inclusion in fragile communities is a blessing for those who give, even more so than those who receive. Watching communities grow through employment, and children's lives improve is our gift.
Amanda Kamin is global director of marketing and communications at VisionFund International.
To learn more about the power of financial inclusion to change lives, read their social performance report which has just launched.
