Microfinance is a general term to describe financial services to low-income individuals or to those who do not have access to typical banking services. Microfinance is also the idea that low-income individuals are capable of lifting themselves out of poverty if given access to financial services. Formal financial institutions were not designed to help those who don't already have financial assets - they were designed to help those who do. So what do poor people do? Follow this link to read more about Microfinance.
During our return visit to the Zata community we went in search of families and women who had dreams of creating a brighter future for their children but didn’t have the financial assets to do so. With a quality education and clean water now available to their sons and daughters we wanted to know what they would do with a little financial help to give their children opportunities they never had. We spent a day visiting the parents of our beloved Zata students with our local NGO partner REST (the Relief Society of Tigray) who will be administering the micro loans we are funding and provide the necessary training that will ensure success. We walked through fields and met with them in their homes and the fields they farmed. Their work ethic and resilient attitudes were inspiring!
How it Will Work
Each of the loans that REST administers will be 5 years in length and the interest is paid only during the first year. The borrower does not supply any collateral will play back 10% of the loan in the first year, 20% in the second year, 20% in the third year, 20% in the fourth year and 30% in the final year. Local REST associated will help the borrowers purchase the items the are getting as well as provide any necessary training and support they need to ensure their success.
Following Their Dreams
The first family we met were a priest, Beyene, 57, and his wife, Nigsty, 46. We visited with them in their home and sat down with them to discuss their needs. The two of them farm several acres in a field close to the Zata School and were interested in purchasing a motorized pump so they could irrigate their fields and grow crops that required more water but they could sell for more money at the local market. They have plans to use the money they will make to send their 6 children on to secondary school and possibly to college.
Berhane, 47 and his wife Berhe, 35, were busy working in their corn fields when we met them. They have 5 children and Berne said her dream for them is to get a good education and have more opportunities than she did. They would like to plant tomatoes and onions in their fields that they can sell at the local market because most of the local farmers sell corn and potatoes. A motorized pump will allow them to grow these vegetables that require more irrigation but will bring a bigger profit.
Next we met with a group of five women who are heads of their households and interested in businesses that will help them provide quality educations for their children. The first four women all have land that they farm with their older children and the fifth woman has a small business of selling things at the local market.
Mulu is 50, the head of her household and has 3 children. She wants to start a small business selling coffee and tea near the Zata School. She wants the money to build a small stand, including all the tea materials, tea cups and necessary supplies. She is excited about this venture because she knows she will be able to do the work well into her old age and it is a business that she can train her daughters to run.
Berne, 40, is a widow and mother of 5 and dedicated to the well-being of her family. She has been renting her plot of land to another family but with a loan to purchase a water pump she will be able to farm the land herself and irrigate the corn and potatoes she will grow. She is also interested in buying an ox to help with the plowing.
Abeba, 45, is the head of her household and has 5 children. She has been farming a plot of land with her oldest son for 4 years and would like to purchase a water pump to make it easier for them to irrigate the potatoes and beans they grow. She also wants to buy 2 oxen, 5 sheep and 5 goats that she wants to breed and sell for profit.
Gidey, 43, is a widow and mother of 4 who wants to make enough money to send them all to secondary school. She has a plot of land that she uses to grow potatoes and a motorized water pump that she shares with two other women. She needs a loan to purchase a new delivery hose for the pump to replace the old one that leaks.
Hirut, 30, is the head of her household and has 2 children. She currently has a small business selling school supplies and home goods to the local Zata residents. She would like a loan to expand her business so she can sell at the local market.