1. Why don’t they just go to a bank?
Poor people often have a hard time getting a loan. First, they generally don’t have the needed collateral for a loan from a bank. Second, most local institutions require repayment of a bank loan in six months. Most activities do not start generating revenue right away, making it necessary to have another income source in order to pay back a bank loan.
2. Why such small amounts?
True, loan amounts ranging from $100 to $1,000 are small, but they are not insignificant for microentrepreneurs who often would rather start small and not indebt themselves beyond their means.
3. Why charge the poor interest at all?
The reason interest is charged is twofold: a) to cover the fees that are charged at the local bank where the microfinance revolving fund is kept; and b) to grow the size of the revolving fund to be able to launch additional projects in the future.
4. What other organizations are doing this?
There are quite a few organizations that are doing this. Check out the links.
5. Is micro-lending the solution to poverty?
No. Micro-lending is not ‘the’ solution to poverty, but carefully done and combined with biblical financial principles, it is a way to help grow up microentrepreneurs who successfully practice their vocations to the glory of God.
6. Why not just give the people the gospel?
Giving the Gospel is very important. And we are doing so as we translate the Scriptures for the Bakwé as well as preach from them. However, Jesus also left us the example of ministering to people’s physical needs.
7. Do any of the team members benefit financially from this?
Not on your life! In fact, the US-based team members do all of the work pro bono, including covering all of their own travel and per diem expenses.