‘I Earn a Profit. I Can Feed My Family’: How Microcredit Lending in Haiti Is Changing Women’s Lives - Ms. Magazine
‘I Earn a Profit. I Can Feed My Family’: How Microcredit Lending in Haiti Is Changing Women’s Lives - Ms. Magazine
An interview with Raising Haiti microloan recipient entrepreneur Marimène Tijuste shows the achievements of microcredit for women.
In 2020, the Raising Haiti Foundation began funding the provision of small loans ($25-$50) to 50 women clients per community. By July 2024, the program had grown to a total of 426 beneficiaries who received loans in the $76 to $1,132 range. By the end of 2024, the program will expand to enroll 500 clients, with an increasing loan range.
Most of the women use their loans to become entrepreneurs, or to expand their current businesses, selling goods in local markets. Some use them to purchase livestock or crop seeds, improving their farming outputs. Besides loans, the women receive training on topics such as business management, customer satisfaction, how to avoid supply shortages, and the role of local leaders in community development.
Is this the orphan crushing machine again
In case someone doesn't already know about it, the charity "Give Directly" tries to find the world's poorest people and gives them lump sums of money. Not as a loan. They recognize how hard it can be for people in that level of poverty to pay back money, and it also eliminates a lot of the issues that material based charities can inadvertently cause on local economies!
They're my number one favorite charity now, but I didn't know they existed till a few years ago so I'm trying to spread the word!
what's the interest rate?
This always bothered me about Kiva.org. My money provides the collateral to secure loans for people that would have difficulty getting a loan otherwise. All good so far. But then the loan company charges 20%+ of interest. Wtf? I have already collateralized the loan, why are they still charging that level of interest?
20-40% is still okay. Payday loans in those amounts are usually 200-400% (APR) in the US, or even twice that. In Haiti the official interest rate has been ~7-30%, now 17%. Real interest rate seems to be -14% at the moment because of inflation, historically it was ~7% to 0%.
So 20% is actually an amazing deal, especially if you consider that processing costs are much higher for micro loans, proportionally speaking.
Whoever is handing out these loans must barely be making a profit at all. I assume they are non-profit?
But I'm not sure how it works in detail, it might be a different picture with dollar loans.
It says "low interest" on their website: https://www.smallholderfarmersalliance.org/programs
They've had 100% repayment rate for over a decade. One of the quirks of the program is that women band together with other women to ensure the loan is paid back. The maximum loan term duration is 6 months.
NB: All of this information is from the alliance. I haven't seen anything from a third party to verify the claims.
All those subprime lenders had to go somewhere where there isn't as much regulation...
Is this not the same as https://www.bloomberg.com/graphics/2022-microfinance-banks-profit-off-developing-world/ ??
If we're talking about such low sums - why even have interest? Why not lend the money for free? There's C suite banking execs that blow that much money on their lunch supply of coke...
Debt fucks people up - I've personally known folk who've used debt "wisely" for business purposes only for it to crumble and they take their lives because they don't see a way out.
The micro-loans in Africa use very low interest rates as a way of encouraging responsibility for the loan, as well as a means of generating small amounts of capital which is used to fund future loans. In the programs I'm familiar with, all the money stays in the community instead of being siphoned out of it.
That's good to hear! - still feels weird to take profits from people worse off than you - but if it helps them and stays in the community it doesn't seem like that big a deal
Does that mean that Microsoft pay the interest and underwrite defaults? Or are they peddling debt? I hope it's the former.
At the amounts quoted it would be reasonable to just give them the money. It's also very effective.