Crowdfunding: A Cure to the World's Social Problems?

This blog was written by Lendwithcare lender, Jan Tchamani, and originally posted on DuCredit's website. It has been re-posted here with permission.

 

The Chitimba Women's Group, supported by Jan through Lendwithcare

Crowdfunding activity has been on the rise for a few years. With the rise of Kickstarter and other platforms, no sector benefits more fruitfully from crowd funding initiatives than the 3rd sector.

Micro-finance initiatives allow anyone to invest small amounts of money which make a huge difference to entrepreneurs and workers in the third world. Allowing them to provide a sustainable future for their families.

We asked one UK based donor, Jan Tchamani, one of AgeUK’s current internet champions, why she chose to give through crowdfunding and tell us a little about her experience of charitable giving through LendWithCare.

"It’s really important to me to do charitable giving, even though my means are quite limited. And, let’s face it, everyone has limits. Also, because I’ve been learning about sustainable development over the past few years, it’s also important to me to give in a way that’s responsible and environmentally-friendly.

Ever since I was at school, I’ve been fundraising. I think my first foray was running a sponsored music  day when I was a pupil at Stourbridge High School in the 1970s, raising funds for the Sunshine Children’s Home. I played the piano, as a soloist and accompanist, from 9am to 5pm, friends sang and played instruments, and I still remember what fun we had, and what a buzz it gave us when we handed over the money we had collected to the school secretary to send off.

When I was in my 30s, I was able to go overseas and do two years of development work in the Lobi tribal area of Burkina Faso, W Africa. I was teaching in a school for community leaders: mostly French language, since that was the language of administration, and the students had to be able to write letters and deal with officials. Other development workers were teaching well-digging or composting, treating ailments, organising conferences to bring local communities together, or getting the local languages written down in order to preserve them. Everyone was doing something useful. The Lobi are very dependent on subsistence farming, and therefore on the climate, so I saw at firsthand how important it is for charities who get involved in developing countries to be aware of the right way and the wrong way to intervene. I’m satisfied that Lendwithcare know what that right way is: small amounts lent, rather than given, and to people who have a solid business development plan.

I’m no longer able to travel abroad and help, but doing my bit is still very important to me. Although my means are modest, I’m still so much better off than some of the entrepreneurs the organisation is helping. I tend to go for individuals, and I tend to favour farmers who are trying to cultivate more efficiently, and get to a point where they can employ people and have enough produce to spare to sell it at local markets so, for example, they can afford to improve the house they live in, install a simple irrigation system, or pay for their children’s education.

I’ve been with Lendwithcare – run by CARE International UK – for about a year. I think I saw an ad for them on Facebook, and followed up. Lendwithcare.org offers a way of giving online that provides microfinance for entrepreneurs in developing countries. The entrepreneurs concerned have to have a strategic development plan, and the amount they want to borrow is calculated exactly, to the nearest pound.

Lendwithcare gives you plenty of information about the individual entrepreneur on which to base your choice, including a photograph. You can start with a loan as small as £15, and you can see how near their borrowing target the person has got. You get a notification email when they’re 100% funded. There’s also a repayment schedule. Nobody I’ve lent to has ever failed to pay back the scheduled monthly amount, and they often pay back faster, which goes to show how effective the borrowing is in improving their situation.

I get monthly emails from Lendwithcare – they’re great at communicating, but they don’t bombard me, and they never use emotional blackmail. In fact, their emails are always the first I look at when I open my inbox, because they’re always positive: “X, whom you helped, is now fully funded!”, a thank you, or news that all of my £15 has come back and I can reinvest it. Looking back over 2014 and the number of people I managed to help with my £15 gives me such an amazing feeling of being connected to people in other parts of the world – people who are really trying to improve their lives, and the lives of their local communities. The minimum investment amount of £15 is so small, really – the price of a simple pub lunch for two, or a couple of cinema tickets."

Register on Lendwithcare today and join Jan in supporting entrepreneurs in developing countries work their own way out of poverty.

Unprecedented floods in Malawi

A few days ago, terrible floods destroyed homes and livelihoods in Southern Malawi.

Flooded areas in Nsanje ©Innocent Mbvundula/CARE

The true extent of the damage is still not known but Lendwithcare's microfinance partner in Malawi, the MicroLoan Foundation, has told us that clients from at least two of their branches have been badly affected. It will take around six weeks for the water to subside enough for  MicroLoan Foundation staff to assess the impact of the floods on their client’s lives and businesses and in the meantime they are simply going out to reassure all their clients that they will help them through this crisis.

We have of course informed our local partner that Lendwithcare will also support them through this difficult time so as soon as we receive more information on which clients have been affected and to what extend we will let you know.

As we wait for more  information , here is the testimony of Innocent Mbvundula, a CARE Malawi member of staff.

“The devastation of floods as we saw it in Nsanje”

Flooded areas in Nsanje district, Malawi where waters have damaged houses, livestock and property. ©Innocent Mbvundula/CARE

Malawi’s Nsanje District in the lower Shire River basin lies 150 feet above sea level. While the district has been hit by floods on many occasions in the past, the recent continuous, heavy rains that pelted the region for five consecutive days led to heavy flooding in areas that have never experienced flooding before.

Floods have, for many people of Nsanje, become a normal annual occurrence, but the scale of this year’s floods are unprecedented. Travelling from Malawi's commercial city of Blantyre to Nsanje at the southern tip of Malawi, one is greeted by the sorry sight of damaged houses, hectares of land where the crops have been washed away, and men, women and children in dire need of basic amenities in various evacuation centres. All this is as a result of floods that have left over 50 people, including numerous children, dead in the district.

In traditional authority Mlolo, all public services have been suspended. Health centres and schools are submerged in water. Access to the area is only possible by helicopter and boats, making it difficult to reach the affected households. Listening to the affected people, especially women, it is clear this is a tragedy that they will never forget.

Grace Lawrence, a 20-year old pregnant woman relocated to Nyachilenda evacuation centre, will always remember this tragedy due to the loss of her daughter; Grace’s second born daughter, 3-year old Marita, could not be traced at the time of the rescue operation undertaken by the Malawi Defence Forces. Apparently, she fell from the roof and died but Grace does not know exactly what happened. 

Grace Lawrence at evacuation camp. ©Innocent Mbvundula/CARE

For Mathews Damiano of Brighton village in traditional authority Mbenje, life will never be the same. The floods happened at a time when his business was growing from strength to strength. From a humble beginning, his vegetable and fruit business grew steadily to become a reliable source of income. Today, a family that had become self-sufficient is now at the Bangula evacuation centre, destitute.

In a matter of days, the house he and his wife, Elube, laboured to build is but rubble as a result of floods. He lost all his property including a store house located 50 meters from their house. At the time of destruction, the store house had merchandise worth K50, 000 (US$104) in it.

“It will take us some time to recover from this damage. It took us years of hard work to build our house and the store house. We don’t know what to do now,” says Mathews Damiano.

In some areas of Nsanje district essential public services have been suspended. School has been disrupted for thousands of students. The floods have forced children to stop going to school because some schools have been damaged by the floods while others have been turned into evacuation centres. This disruption in school is particularly hard on students waiting to sit for their national examinations in May.

Marita Samuel, an elderly woman in her 80’s we met at Marka camp site, on the Malawi-Mozambique border, says in her life time she has never seen such devastating floods.

“We have experienced floods in the past. It is not a strange occurrence. I remember we had extensive flooding in 1986 and it was destructive, but this flooding is worse than that one. I’m lost for a word,” said Marita.

Clearly, these floods have brought catastrophic effects to the people of Nsanje. It will take time to recover from the loss. In some cases it will be impossible to fully recover, as is the case of loss of life. Families, relatives and close friends have been separated, in some cases, forever. History will record these floods as one of the worst disasters in the history of the lower Shire district.

By Innocent Mbvundula , CARE Malawi”

January 26, 2015

Best wishes for 2014 and a massive “Thank you” for your support to lendwithcare

2013 was a busy and at times a challenging year for lendwithcare. It was also a hugely successful one thanks to your continuing support. 

2013 Highlights

• Our lender community almost doubled and we reached the 15,000 lender mark just before the close of the year
• We made 60,000 loans, lending just over £2m to poor entrepreneurs across the world
• We started working in Pakistan, Zambia and Malawi
• We funded our first social enterprise loans in an effort to reduce air pollution in Metro Manila

Lendwithcare was also covered extensively in the media, including pieces in the Guardian, The Independent, The Evening Standard, The Times and the Daily Express. Click here to see them. 

However, as the situation in the Philippines reminds us, our work is by no means done. It is more important than ever to help individuals and communities rebuild their lives, especially after natural calamities such as Typhoon Haiyan.

Just before the Christmas Holidays we received news that 38 lendwithcare entrepreneurs have been adversely affected by the typhoon and so, their repayments have been paused until an appropriate rehabilitation plan has been developed.  Tracey Horner, Head of Lendwithcare, will be travelling to the Philippines in a few days to meet with our partner there and with the entrepreneurs who have been affected to help devise the plan to help them.  We will keep you informed.  

In 2014 we expect, with your ongoing support, to help more and more micro entrepreneurs to improve their lives and those of their families. 

We did it! £3m of lendwithcare loans to entrepreneurs in developing countries!

The past year has seen phenomenal growth at lendwithcare.org. At that stage we were celebrating £1m of loans made. In March this year we commemorated the doubling of that monumental amount! And I am thrilled to tell you that last week, on 30^thAugust 2013, we smashed through that and our 3 millionth pound was lent by Sharon from Suffolk to Mrs Essowouna Simbama from Togo! Thus far, lendwithcare lenders have:

•        Made over 80,000 loans
•         To fully fund over 5,000 entrepreneurs
•         From seven different developing countries

Supporting more and more entrepreneurs to improve their lives and create a better future for them and for their families.

Astounding, isn’t it?  This achievement is the work of our fantastic lenders – congratulations and thank you for your support!

By Teresa Hall, Lendwithcare Volunteer

To get the latest lendwithcare.org news, like us on Facebook or follow us on Twitter  

Video update | Market fires in Togo & how lendwithcare.org's microfinance partner helped

Early this year two of Togo's biggest markets, Kara and Lomé, were devastated by fire. The fires, which occurred 48 hours apart, destroyed both marketplaces and the hundreds of businesses that lay within their walls.

 

Lendwithcare’s microfinance partner in Togo, WAGES, told us that the fires were a huge disaster and that many market vendors had lost everything – some lost all their money as well as their stock since they had kept it in the marketplace for safekeeping. A large number of the market vendors, particularly in the Grand Market of Lomé, are clients of WAGES and were faced with the added stress of how to meet loan repayments without a way to generate an income. In this short video update, we learn how WAGES helped clients to get their businesses back up and running as well as reworked repayment schedules (often pausing repayments) to give time for businesses to recover.

Watch video here or click picture to view
This film was shot and edited by Fiona Molloy and Nik Wood www.nikwoodtv.co.uk

None of the businesses destroyed in the fires of Kara and Lomé belonged to lendwithcare entrepreneurs since the vendors in these two markets tend to have bigger businesses than those typically supported through lendwithcare. However, some lendwithcare entrepreneurs will have experienced a knock-on effect since many buy their stock from vendors in Lomé market. 

With the assistance of organisations like WAGES, most of the vendors are now trading again and the government is in the process of building a new permanent place for them to trade.

Update from the lendwithcare.org team & WAGES staff

You can support dozens of micro-businesses like those in Togo by going to www.lendwithcare.org today! 

Lendwithcare in Cambodia | How a growing economy impacts on the poor

Lendwithcare on location in Cambodia

Recipient of an agricultural microloan through lendwithcare
© CARE/Nancy Thomas

The last time I visited Cambodia was in 2005 and as I walked out into the humid night air and towards Phnom Penh’s visibly transforming skyline, I was eager to find out how Cambodia had changed since my last visit.

This time I was not visiting Cambodia as a tourist but on behalf of CARE International UK, and lendwithcare. And before I had even reached my hotel in the heart of Phnom Penh I was struck by aspects of this rapidly developing country that I did not see (or at least notice) when I visited in 2005. Three particular aspects stood out to me over the next few days: Firstly, there are a lot of non-governmental organisations (NGOs) working in Cambodia (in fact there are 3,000 NGOs currently registered with the Ministry of the Interior); secondly, a growing economy has led to increased migration to the cities, especially to find work in one of the growing number of garment factories (predominantly owned by South Korean and Chinese companies) on the outskirts of Phnom Penh; and thirdly, the microfinance sector has undergone very rapid growth.

My first observation should have been expected. Years of war and internal conflict made it impossible for Cambodia to take part in the economic development experienced by many of its neighbours towards the end of the 20^th Century and when the fighting did eventually stop in 1991, Cambodia and its people were left war-torn and devastated.  Over the last two decades this has started to change and in recent years, as my second observation indicates, some powerful regional investors have started to play for big stakes in Cambodia’s economy. In fact South Korea, China and Japan invested a combined $762.6m in Cambodia last year, representing 33% of total foreign investment, and all three replacing the UK as Cambodia’s largest foreign investor.[1]

A Village Savings and Loans Group in Koh Kong Province (CARE Cambodia)
© CARE/Nancy Thomas

Despite this growth, Cambodia remains one of Asia’s poorest countries (57.8% of the population live on less than $2 a day) and social development has not managed to keep pace with economic. When I met with the CARE country office in Phnom Penh they explained that development has been concentrated in Cambodia and has resulted in ‘increasing inequality between urban and rural areas, between rich and poor and for socially excluded groups … and the disparities in health, education and employment opportunities between different areas of the country and between different population groups, remains substantial.’ All of which provides an understandable context to the large number of NGOs I observed working in Cambodia.  Also, I quickly discovered that this disproportionately high number of registered NGOs is actually misleading since a lot are inactive and have ceased (or never in fact started) operations.  

My second and third observations were equally predictable. After all, it would be unusual to visit a developing country today without sharing the experience with a businessman from China or stumbling across the branch of some local microfinance institution. However, when I visited Cambodia this time, I was quite surprised by the speed with which both had come to dominate Cambodia’s economic landscape. The growth of the latter is particularly important to me since microfinance, and providing fair and effective financial services to the poor, is a key part of CARE’s work and I was eager to find out what impact this influx was having on the poor. The well-publicised cases of aggressive money lending practices in India and the devastating over-indebtedness this contributed to undoubtedly springs to mind when you think of market saturation of microfinance.

Unsurprisingly the growth of the Cambodian microfinance sector matches that of Cambodia’s overall economic growth over the last couple of decades. Emerging from a virtually non-existent financial sector in the early 90s as part of NGO-led programmes on financial inclusion, microfinance in Cambodia has subsequently developed into a much more sophisticated and commercialised machine. There are now 39 microfinance institutions operating in Cambodia, providing over 1.3 million people (9.2% of the population) with an array of financial and non-financial products and services.  And in keeping with the raison d’etre of microfinance, these institutions predominantly serve those who typically live outside the formal financial sector - namely women (81%) and people living in rural areas (80%).[2]However, like in India, Cambodia’s fast-growing microfinance sector faces some serious problems. Perhaps the two most worrying of which are: the prevalence of multiple lending and the lack of product diversification (i.e. credit is the main product offered by most MFIs).

Community Based Microfinance Organisation (CBMIFO) of CCSF in Takream
© CARE/Nancy Thomas

So when I met with our microfinance partner in the north-west province of Battambang - although reassured by the fact that CARE very carefully select the institutions with which they work -  I was understandably worried about how this rapidly changing sector had impacted on their operations. The Cambodian Community Savings Federation (CCSF) has been involved in providing essential financial services to the poor pretty much since the birth of microfinance in Cambodia. Set-up in 1998 as a Small Economic and Development project of CARE Cambodia, CCSF looked set to mimic the growth of the microfinance sector in general as it registered as a rural credit provider (independently of CARE) in 2003 and expanded operations. However, there are three specific qualities about CCSF that have meant it has not developed into a commercial institution but stayed true to its principles of trying to provide fair and effective financial services to the very poor. These qualities are: 

 1. CCSF is a credit union and therefore not driven by a need to generate profits for shareholders

2. As is suggested by the name, CCSF is primarily a provider of savings products for its members (1 of only 4 microfinance providers in Cambodia able to deposit savings) and provides a diverse range of products, which are tailored to suit the communities they serve. 

3. In the last 10 years instead of expanding operations quickly across the whole of the country (as many of its competitors have done), CCSF has remained focussed on serving the rural populations of North-West Cambodia. Not only allowing them to expand into more remote and underserved communities but also to know the communities and their financial practices well enough to meet their needs adequately.

It is these qualities, I believe, that have enabled CCSF to remain true to their mission of providing affordable financial and non-financial services to the poor over the last 10 years and avoid becoming involved in some of the harmful practices we know only so well.

As I left Cambodia two weeks later, laden down with gifts made by children and women supported by various fabulous NGOs and boarded a plane full of Chinese and South Korean tourists, I reflected on how much things had changed in the eight years since my last visit. I also felt a renewed sense of pride about the microfinance institutions we support through lendwithcare. The time I was lucky enough to spend with CCSF and their clients reminded me that despite a certain loss of faith by some in microfinance, there are a lot of really good providers of microfinance out there (even in saturated markets) and it is our duty to the poor, to make sure those good ones survive.

Lendwithcare entrepreneur, Sea, with her family
© CARE/Nancy Thomas

^{By Nancy Thomas, Lendwithcare.org Executive}

Every year lendwithcare visits each of its existing microfinance partners in country to monitor the progress of entrepreneurs funded through lendwithcare and to conduct an evaluation of the microfinance institution's (MFI) operations. This trip was part of our annual evaluation of our partner in Cambodia, CCSF.

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[1] http://www.phnompenhpost.com/2013013161092/Business/south-korea-leads-asia-s-big-three-as-cambodia-s-leading-investor.html

[2] http://cma-network.org/drupal/MicrofinanceEnvironment

Lendwithcare in the Philippines | Providing more than just microcredit

Lendwithcare on location in the Philippines

Carlito Curacha, a farmer who received a microloan through lendwithcare

© CARE/Jo Broughton

Jo Broughton, CARE International UK's PR & Communications Executive, visited lendwithcare's microfinance partner in the Philippines, SEEDFINANCE, and tells us how microfinance institutions (MFIs) can (and do) provide more than just microfinance ...

I've come to the end of an incredible visit to Cebu island, Philippines. In the past 3 days I have visited 20 lendwithcare entrepreneurs and have been blown away by what they have done with their loans, the opportunities they have created and embraced.

Like every lendwithcare visit, it has been characteristically heartening to see how these businesses are thriving because of access to vital capital. A typical story is to see that within a year or so of investment, coupled with financial and business advice from our partner MFIs, entrepreneurs have managed to double or triple their income, often more. The impact this has on a family is, obviously, always positive and often life-changing.

But this trip has highlighted to me the importance of the services offered by our partners above and beyond the provision of loans. These services are impressive in both range and quality. Lendwithcare, on principle, will partner only with MFIs that offer more than just loans. We want to ensure that our entrepreneurs are in good hands; that they are being given the right advice, are being encouraged to save as well as or, in nearly half of cases, instead of borrowing. That they have access to healthcare and insurance.

Here in Cebu, lendwithcare partners with SEEDFINANCE, a socially responsible microfinance institution initially set up by CARE, now independent. In turn, SEEDFINANCEpartner with regional co-operative associations, whose activities benefit their members and annual dividends are reinvested to provide for their community. I was lucky enough to meet and be shown around by the proud and dedicated staff of one of these co-operatives.

LMPC staff © CARE/Jo Broughton

Lamac Multipurpose Co-operative Association serves the people of a remote valley in the coastal mountains of Cebu. This cooperative was formed in 1973 when 70 local farmers invested an initial capital of around $1 each. Their goal was simple yet vast: to work together to meet the needs of the people living in a valley with no electricity, no running water, no schools, no healthcare and no access roads. 

Today, LMPC is 25,000 people strong. Ninety per cent of the valley’s 5,000 households are members of the cooperative and its total assets amount to 634 million pesos (approximately £10m). Together, and in just one generation, the members have built 21 kilometres of road along the mountainsides, providing access to roads to the two nearest towns. They have provided electricity to all homes and water to 600 homes, and access to clean water for the others. They have built a school. Their consumer division meets the people's retail needs; the production division encompasses the agriculture that feeds them as well as production of essentials like soap and candles.

LMPC now run an eco-tourism centre, which includes community resources like a covered sports hall, large catering venue for celebrations, ponds for fishing and a 1-hectare intensive farm for small-scale production and education. 

 A generation ago, the people of Lamac had no access to healthcare and relied on faith healers to treat the sick. Now, for an affordable monthly sum, the cooperative provides families with access to good quality healthcare in an accessible health centre. They are insured against loss and bereavement. And children no longer have to walk 14km each way to get to school, so school attendance is now 80% where two decades ago it was close to zero.  All achieved, according to LMPC, through ‘active volunteerism’: early members contributed whatever talents and resources they had for the benefit of the community.

Now, through Lendwithcare’s partnership with SEEDFINANCE, we are able to provide loans to the entrepreneurs of LAMAC, helping their small scale businesses go from strength to strength. But as LAMAC demonstrates, loans are just a small but vital part of the picture. By partnering only with organisations who offer these services, lendwithcare can ensure that we are supporting whole communities.

I have visited lendwithcare entrepreneurs in three continents and I always come away feeling heartened by the stories they tell me about the ways they have invested their loans and how this has improved lives for them and their families. This isn’t charity, it is investment- and these people invest wisely and conscientiously. It is wonderful to see, through partnering with organisations such as SEEDFINANCE, lendwithcare is supporting such life-changing investment on a community-wide scale. 

By Jo Broughton, PR & Communications Executive at CARE International UK
You can follow Jo on Twitter @Jo_CARE_Intnl

For more information about lendwithcare, please visit www.lendwithcare.org