The Basics
Almost two thirds of women in developing countries work at home or support their families through self-employment at a very local level. Examples include selling fruits and vegetables, cloth weaving, pottery making, livestock rearing, handicraft production and other types of small-scale businesses.
Most of these businesses are operated at a subsistence level, as their owners perpetually lack the capital to expand or to ensure their sustainability.
A modest loan of $120 or $200 can purchase production necessities such as sewing machines, farming tools, and raw materials in bulk at substantial savings. Such investments bring tangible increases to family income.
However, since the micro-entrepreneurs lack collateral, credit history, or records of income, they are unable to access mainstream banking services. As a result families suffer from inconsistent incomes, and often turn to unreliable and higher risk financial services like local “loan sharks”.
Impact’s Women First Banking model offers an alternative to mainstream banking, by providing microloans to support microenterprise initiatives. Once approved by a group of peers, Impact’s field team meet with each potential borrower to assess their abilities and needs, and to make sure that a micro-loan is right for them.
Even the small amounts we provide, starting at just $127, are often sufficient to vastly increase the viability of the borrowers’ businesses, to reduce their daily struggle to meet basic needs, and to assist them to become more self-reliant.
Like any conventional loan, loans to a Women First Bank are paid back in full with interest charged on the outstanding balance. Loan repayments are made to a revolving fund, from which new loans are made to the same or new credit applicants. As the number of loan recipients increases, the revolving loan fund grows, until the cycle of lending and repayment becomes self-sustaining.
In addition to microcredit, we offer our clients other microfinancial services like savings and basic insurance. We also combine these financial services with health and basic education initiatives to more thoroughly address the needs in the communities where we work (see Development Strategy).
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