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.

Diary from the field - cycling from Vietnam to Cambodia

Head of Lendwithcare, Tracey Horner, has embarked on a challenge of a lifetime. For the past seven days Tracey, along with ten other CARE supporters, has cycled from Ho Chi Minh city in Vietnam to Battambang in Cambodia (a gruelling 460km) to raise vital funds for CARE's poverty-fighting programmes. 

Before peddling off into the Mekong Tracey met with one of Lendwithcare's newest microfinance partners, MACDI, who are based in northern Vietnam. 

What follows is her diary from the first six days.


Day 1:

I left a very cold London bound for Hanoi and the first leg of my trip.  Since my trip comprises a field visit to our partner MACDI; a presentation to one of our corporate supporters, Hogan Lovells; a 460k cycle ride; and some beach holiday time at the end, I had to pack a rather diverse range of clothing!

I always look forward to visiting our partners and meeting some of the entrepreneurs we are supporting and although I am looking forward to the challenge of the cycle adventure; having never done anything like this before, and being under prepared I have a bit of trepidation about what might lie ahead.



Day 2:
 

Arrived in Hanoi at 6am and checked into my hotel. I expected it to be cooler in Hanoi than in the south of the country but not 15 degrees as it has turned out to be. I decided to have a wander round Hanoi to get my bearings, followed by a couple of hours sleep.  Min Thai, the CEO of our partner MACDI, came and picked me up for lunch and took me to Hanoi's Ethnology Museum which provided a fascinating insight into the different groups of ethnic Vietnamese. It became clear why so many of the Lendwithcare Vietnamese entrepreneurs have very similar names.  There are only around 60 different surnames in Vietnam, and each area has around five different surnames.  I ended the day with a little stroll back to the hotel, giving myself time to take in this vibrant city.



Day 3: 

Today we went on a trip to the famous Ha Long Bay.  It was a 6 hour round trip to get there but it was well worth it - despite the weather being cold, cloudy and foggy.  Later that day I met with Regan Leahy, from Hogan Lovells citizenship team, who is accompanying me on the field trip since she is taking part in the sponsored cycle ride later in the week.

Day 4:

Regan and I left the hotel at 8am to travel three hours to Hoa Binh province where some of the entrepreneurs we have supported through Lendwithcare are located.  The car journey gave us the opportunity to learn more about MACDI's work from Min Thai and in particular learn about the broader work they do in addition to microloans.  It is clear that Min Thai is passionate about her mission to improve the lives of poor people, particularity those living in remote rural areas of Vietnam.  


Life is very hard indeed if you are far from a town or city with few assets and no access to formal financial services. The closer we got to our destination the more obvious the difference became between the big cities and the rural communities. 




We arrived at MACDI's tiny office which is home to five loan officers and one other member of staff.  The office is rented at a very low cost from the local authority.  We also met with two local officials who told me how much they value the work of MACDI - particularly the work they do to improve the environment by helping people install bio gas facilities to turn their animal waste into gas.  


They also mentioned that they appreciate the training that MACDI give to borrowers, training in things like animal care, protection of the environment and home sanitation.





To see some of MACDI's assistance in action, Regan and I visited a home that was in the process of having a bio gas plant installed.  It was a very interesting process to see. It starts by digging a massive hole in which they put the chamber that the waste will flow into and later be turned into bio gas. 

MACDI worked very hard to set up a relationship with a local bio gas installing company to negotiate a good price for their borrowers. A part of the agreement includes after care assistance, which ensures that if there is any future maintenance needed the borrower is able to access this help for free or at a greatly reduced price.

This is the theme that ran through my visit, MACDI linking people with the private sector - and also trying to link borrowers to appropriate markets for their products.

After watching the bio gas installation, we visited a couple more entrepreneurs. Part of a Lendwithcare evaluation is to check a random sample of entrepreneurs that appear on the website and ensure that all the details match up with the loan that the borrower has received.

Every house we visited began with a ritual of pouring us all some green tea - delicious but there is only so much green tea you can drink in one day!

That night we stayed in the only hotel in the area.  It was very cold in this mountainous region - so cold that both Regan and I slept in our clothes!

Day 5: 

Regan and I left the hotel at 8am and ate a bowl of Pho (noodle soup) for breakfast and visited a number of Lendwithcare entrepreneurs.

The first women we met was called Phoung Dinh Thi. 

One of the things I always ask Lendwithcare entrepreneurs about is their children and on this occasion, as soon as I did so, Phuong Dinh Thi started to cry.  She explained how, her disabled daughter had died only last May.  

She had spent months prior to her daughter's death at home caring for her daughter and had to spend all their meagre savings on medical treatment.  As a mother who has also lost a child it was very hard to listen to Phuong Dinh's story and not be visibly moved. 

Phuong Dinh has one other child and she said that the loan from Lendwithcare has helped her a lot since she was able to buy some pigs and chickens as well as 10 geese which will provide an income for her and her family.  In the future she would like to buy a motorbike as this would make her life a lot easier - it is very remote and she has to walk a long way with a very heavy load to take her rice to the mill and then the local market.  She would also be able to take her son to school which is a 6km walk away.

Between visits we stopped along the roadside many times to buy produce from local people; Min Thai said she always likes to buy from the local people. She is actually in the process of setting up a website to showcase products to others in Vietnam and help her clients find a market for their products.

At the end of a long day of meeting Lendwithcare entrepreneurs we returned on the three hour journey to Hanoi and spent the night in Hanoi.

Day 6:

The next day we visited Hogan Lovells in their Hanoi office to give a presentation about Lendwithcare and have a meeting with Hogan Lovells and the MACDI staff. 

Min Thai took the opportunity to set up the sale of a pig from one of her borrowers to a Hogan Lovells staff member. As the new year (Tet) holiday is approaching it is common for people to buy lots of food for the celebration.
 

Later that day I flew from Hanoi to Ho Chi Minh city to stay the night at a colleague's house. Tim Bishop works for CARE International UK but is based in Vietnam as a Regional Private Sector Engagement Specialist, he has been working for many years on promoting the role of business and markets in development and has a fantastic blog, which I highly recommend.   

Tomorrow the cycling starts ... and I have to say, I'm not quite sure I'm ready for this ... I'll keep you posted!

By Tracey Horner

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

Guest Blog - A gift that keeps on giving

When for my birthday I asked for donations to my charity instead of presents none of my friends or family thought that was such a good idea. To be fair many of them give already but generally people like to give gifts, to pick something out and see it be appreciated. To me the idea of getting donations without painful form filling, standing in the cold or embarrassing ‘asks’ seems like a great gift but for people who can’t see it being spent, see the money making a difference or people enjoying what it provides for them it’s perhaps less rewarding.
With donations as with gifts it’s great to be able to see it make someone happy.
One of my friends, Helen, was listening when I told her about how much I loved Lendwithcare. How not only was the scheme a great concept but one that comes with an amazing amount of consideration and attention to lenders. My enthusiasm for Lendwithcare led me to ask to visit their partner in Manila, something I wrote about in a previous post and since then I have continued to be impressed with the varied and regular updates, enthusiastic blogs from staff and frank explanations when things have gone awry.
I’ve bought Lendwithcare for three people that I can remember. For my young niece as a nicer way of giving her some money, although I hope she’ll never withdraw from the account, for my dad I chose an entrepreneur from Malawi as he’d spent time there many years ago and for someone who I suspect might never have cashed it in. And this is where vouchers really come into their own.
 We’ve all received presents we didn’t want. Without wanting to name and shame I’m sure my whole family would understand that we don’t really want to receive any more t-shirts or key rings bearing pictures of holiday destinations. But this present doesn’t get abandoned in a drawer or only worn to bed. Even if that person never looks at it again the money is already in the right place doing its job.
For my birthday last year Helen got me a Lendwithcare gift voucher. So now even though I’ve put money of my own in over the years I now think of her gift every time I get a repayment or have enough in my account to make a new loan. That’s an awful lot of enjoyment already out of one voucher. I’m sure it will carry on for years to come.
With donations as with gifts it’s great to be able to see it make someone happy.
One of my friends, Helen, was listening when I told her about how much I loved Lendwithcare. How not only was the scheme a great concept but one that comes with an amazing amount of consideration and attention to lenders. My enthusiasm for Lendwithcare led me to ask to visit their partner in Manila, something I wrote about in a previous post and since then I have continued to be impressed with the varied and regular updates, enthusiastic blogs from staff and frank explanations when things have gone awry.
I’ve bought Lendwithcare for three people that I can remember. For my young niece as a nicer way of giving her some money, although I hope she’ll never withdraw from the account, for my dad I chose an entrepreneur from Malawi as he’d spent time there many years ago and for someone who I suspect might never have cashed it in. And this is where vouchers really come into their own.
We’ve all received presents we didn’t want. Without wanting to name and shame I’m sure my whole family would understand that we don’t really want to receive any more t-shirts or key rings bearing pictures of holiday destinations. But this present doesn’t get abandoned in a drawer or only worn to bed. Even if that person never looks at it again the money is already in the right place doing its job.
For my birthday last year Helen got me a Lendwithcare gift voucher. So now even though I’ve put money of my own in over the years I now think of her gift every time I get a repayment or have enough in my account to make a new loan. That’s an awful lot of enjoyment already out of one voucher. I’m sure it will carry on for years to come.

This blog has been reposted here with permission from Amy Lythgoe.
Originally posted here

When for my birthday I asked for donations to my charity instead of presents none of my friends or family thought that was such a good idea. To be fair many of them give already but generally people like to give gifts, to pick something out and see it be appreciated. To me the idea of getting donations without painful form filling, standing in the cold or embarrassing ‘asks’ seems like a great gift but for people who can’t see it being spent, see the money making a difference or people enjoying what it provides for them it’s perhaps less rewarding.

With donations as with gifts it’s great to be able to see it make someone happy.

One of my friends, Helen, was listening when I told her about how much I loved Lendwithcare. How not only was the scheme a great concept but one that comes with an amazing amount of consideration and attention to lenders. My enthusiasm for Lendwithcare led me to ask to visit their partner in Manila, something I wrote about in a previous post and since then I have continued to be impressed with the varied and regular updates, enthusiastic blogs from staff and frank explanations when things have gone awry.

I’ve bought Lendwithcare for three people that I can remember. For my young niece as a nicer way of giving her some money, although I hope she’ll never withdraw from the account, for my dad I chose an entrepreneur from Malawi as he’d spent time there many years ago and for someone who I suspect might never have cashed it in. And this is where vouchers really come into their own.

 We’ve all received presents we didn’t want. Without wanting to name and shame I’m sure my whole family would understand that we don’t really want to receive any more t-shirts or key rings bearing pictures of holiday destinations. But this present doesn’t get abandoned in a drawer or only worn to bed. Even if that person never looks at it again the money is already in the right place doing its job.

For my birthday last year Helen got me a Lendwithcare gift voucher. So now even though I’ve put money of my own in over the years I now think of her gift every time I get a repayment or have enough in my account to make a new loan. That’s an awful lot of enjoyment already out of one voucher. I’m sure it will carry on for years to come.

When for my birthday I asked for donations to my charity instead of presents none of my friends or family thought that was such a good idea. To be fair many of them give already but generally people like to give gifts, to pick something out and see it be appreciated. To me the idea of getting donations without painful form filling, standing in the cold or embarrassing ‘asks’ seems like a great gift but for people who can’t see it being spent, see the money making a difference or people enjoying what it provides for them it’s perhaps less rewarding.

With donations as with gifts it’s great to be able to see it make someone happy.
One of my friends, Helen, was listening when I told her about how much I loved Lendwithcare. How not only was the scheme a great concept but one that comes with an amazing amount of consideration and attention to lenders. My enthusiasm for Lendwithcare led me to ask to visit their partner in Manila, something I wrote about in a previous post and since then I have continued to be impressed with the varied and regular updates, enthusiastic blogs from staff and frank explanations when things have gone awry.

I’ve bought Lendwithcare for three people that I can remember. For my young niece as a nicer way of giving her some money, although I hope she’ll never withdraw from the account, for my dad I chose an entrepreneur from Malawi as he’d spent time there many years ago and for someone who I suspect might never have cashed it in. And this is where Lendwithcare Gift Vouchers really come into their own.

We’ve all received presents we didn’t want. Without wanting to name and shame I’m sure my whole family would understand that we don’t really want to receive any more t-shirts or key rings bearing pictures of holiday destinations. But this present doesn’t get abandoned in a drawer or only worn to bed. Even if that person never looks at it again the money is already in the right place doing its job.

For my birthday last year Helen got me a Lendwithcare gift voucher. So now even though I’ve put money of my own in over the years I now think of her gift every time I get a repayment or have enough in my account to make a new loan. That’s an awful lot of enjoyment already out of one voucher. I’m sure it will carry on for years to come.

By Amy Lythgoe

Guest Blog - Ethical Loans Transform Lives in the Developing World

This blog has been reposted here with permission from Owen Knight.
Originally posted here

Joining LendWithCare three years ago was one of the best decisions I have made.During this time, my loan has been recycled four and a half times to a total of twenty-five entrepreneurs in six countries. Together with loans from other lenders, it has assisted people who would otherwise have no access to finance on the journey to work their way out of poverty. The individual loans have enabled entrepreneurs to buy raw materials, stock, tools and other essentials to start or develop their business and take control of their lives, in such diverse areas as farming, food production, general stores, market stalls, carpentry, vehicle repairs and sewing and tailoring.

The wonderful thing is that this has cost me absolutely nothing. With UK interest rates on savings at an all time low, it is a no-brainer to make better use of the money by helping people who want to improve their lives through their own efforts and with dignity.

LendWithCare makes interest-free loans to carefully screened microfinance partners that charge ‘reasonable and fair’ interest rates (or charges) to ensure that loans used are for ethical purposes and offer transparency. Loans are repaid in monthly instalments and, once they are repaid, you have the option of reinvesting with a loan to a new entrepreneur or withdrawing the funds. If you can afford to lend a minimum of £15, you will be making a real difference.

LendWithCare is supported by, amongst others, news presenter Alastair Stewart and Deborah Meaden of Dragon’s Den. The Co-operative was a founder launch partner.

Click here to take a look at the videos on the LendWithCare website, to learn more of their work and the benefits to entrepreneurs. 

You will see why, this Christmas, I have decided to double the amount of my modest loan to a worthwhile organisation.

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Owen Knight

Guest Blog - This Christmas, give the gift of giving.

This Christmas, give the gift of giving.
Posted on 30 November, 2014 by Keith Channing

Hang on; I didn’t mean that.

This Christmas, give the gift of lending.

For some months, my wife and I have been involved, in a small way, with Lendwithcare, a micro-finance organisation set up by Care International, one of the world’s leading aid and development organisations.

Microloans from CARE International UK The premise is simple: an entrepreneur in one of the world’s least affluent areas proposes a business idea to a microfinance intitution (MFI). The MFI approves the plan and grants the requested loan. The entrepreneur is then helped to construct a profile that appears on the lendwithcare.org web site. Supporters (that’s you and I) visit the site, select a profile that interests them, and make a contribution to support it. Once the full amount is reached, it is sent to the MFI, releasing their funds to support another entrepreneur.

As the supported business develops and grows, the loan is repaid, and the repayments find their way into your account with lendwithcare. You can then either withdraw them or, more likely, use them to finance another entrepreneur; and so the virtuous cycle continues.


What’s so great about this? Let me tell you what I think:

My money doesn’t go into a ‘pot'; I choose which individual or group is going to benefit from my contribution, based on a good amount of information about the applicant(s) and the business proposal. It’s personal. Many years ago, I was on an emergency blood donor list. On more than one occasion, when we were called to the hospital for an emergency bleed, we (usually only three or four of us) were introduced to the patient who would be receiving our blood. A cup of tea and a rich cream biscuit never gave that feeling!

The full amount of the loan goes to the desired recipient. There is an (optional) addition of 10% of the amount loaned to help cover the running costs,

It is a loan, not a gift; it can be re-used,

I have often heard the hackneyed ‘give a man a fish and you feed a man, teach a man to fish and you feed a family'; think what happens when you lend a man the money to buy a fishing rod, or maybe to repair or upgrade a fishing boat.

One of the people I have been privileged to support in recent months is a Togo man, married with two small children. He owns a small computer shop that provides office services such as photocopying, word processing and computer training. He also sells computer and office equipment.

He applied for a loan to buy a new photocopier and to expand his business. He is also keen to transform his small shop into a training centre, to pass his knowledge on to others. His ultimate goal is to build up his business so that he will be able to provide a better standard of living for his family.

Like most of the people I have been privileged to support, in many walks of life and across three continents, he is fully funded, and is on target with his repayments. The repayments that arrive in our account are all used for new loans.

What has all this to do with Christmas? Simply this: follow this link to lendwithcare.org, and buy your loved one, your friend, your colleague the gift that, quite literally, keeps on giving – a lendwithcare gift voucher.

Green Microfinance - supporting renewable energy in Vietnam

Biogas facility in Vietnam © MACDI 2014

In recent years a growing number of ‘green microfinance’ initiatives have encouraged eco-friendly microenterprises and supported the use of renewable energy. One such programme is implemented by Lendwithcare’s partner in Vietnam, the Microfinance and Community Development Institute (MACDI). MACDI provides loans to rural households so they can install household plants that use animal waste to generate biogas, a clean fuel that can be used for cooking, lighting and heating.
According to Minh Thai Dinh Thi, Director of MACDI, the motivation for providing biogas loans has as much do with the economic as the environmental benefits. She explains that “since households do not need to spend money on buying firewood, and for the poorer families the time spent by women and girls gathering firewood, biogas plants simultaneously save money, time and also reduce deforestation”. 

Biogas offers other compelling advantages. It promotes better health through eliminating smoke from cooking with firewood. It also reduces harmful pathogens from animal waste that might lead to illnesses (the Asian Development Bank estimates more than 70 million tonnes of animal waste is improperly disposed of each year in Vietnam, contaminating the environment and often finding its way into streams and rivers). Importantly it also converts animal manure into an improved fertiliser, saving farmers money on expensive chemical fertilisers. Many families who have installed biogas plants have also commented that their general environment looks cleaner with less foul odours and flies. While the biogas technology can work in most climatic conditions it seems particularly suitable to countries such as Vietnam with generally warm temperatures and sufficient rainfall. 

Biogas being used for cooking in Vietnam © MACDI 2014

However, despite the potential benefits, the adoption of biogas technology has been slow. This is mainly because of the relatively high cost of biogas plants for people living in rural areas with limited financial resources. To overcome this obstacle, starting in 2011, MACDI has been providing households with loans for between US$500-700 with a long repayment period of between 24-36 months to install the biogas plants. On average, households with at least two cattle or six pigs can generate sufficient biogas to meet their daily basic cooking and lighting needs and the investment pays for itself after about three years. To date, almost 400 families have benefited from the loans. MACDI negotiated with a specialist company to build, service and maintain the biogas plants to ensure they are correctly and safely installed so that they have a long life span. MACDI also provides borrowers with training on management and upkeep of the biogas plants to ensure that they receive the best returns from their investment.

Most of MACDI’s borrowers are small-scale farmers who grow rice and maize and typically raise livestock and poultry. Whilst previously the pig, cattle and buffalo manure and crop residue was left to rot or burned (wasting valuable plant nutrients), households now feed the manure mixed with water, but also some crop residue and other organic matter, into the biogas plant where it decomposes. Under anaerobic (without air) conditions the rotting matter produces biogas which is pumped into the home, usually the kitchen, and used for cooking, lighting and in the winter months heating as well. The slurry which has a high nutrient content is used as a fertiliser and crop yields of vegetable crops such as potatoes and onions, fruit, sugar cane and rice have reacted particularly favourably. The biogas generally comprises  just under 60% methane, almost 40% carbon dioxide and a small fraction of other gases such as hydrogen, nitrogen  and hydrogen sulphide. Although methane is a damaging greenhouse gas, since it is burnt the process is essentially ‘carbon negative’.

The potential for biogas in Vietnam is huge, with more than two-thirds of the population earning a living from agriculture, animal husbandry and fishing and most have traditionally relied on wood, agricultural residue and animal dung for their energy needs. Lendwithcare is supporting MACDI to increase the scale and outreach of its green microfinance programme to ensure more rural households in Vietnam are able to install household biogas plants and have access to clean, sustainable and affordable energy.




You can invest in a green loan today by simply visiting the Lendwithcare website www.lendwithcare.org

By Dr Ajaz Ahmed Khan, Lendwithcare Microfinance Advisor

Is peer-to-peer (P2P) lending an efficient way to support microfinance?

The Lendwithcare.org Homepage

Peer-to-peer (P2P) micro-lending platforms, such as lendwithcare, have become a popular method of supporting small businesses in developing countries. Local microfinance institutions (MFIs) select borrowers and appraise their loan applications, which if approved, are financed by the P2P platform. Lendwithcare was established in 2010 and to date some 17,000 individual lenders have financed loans to more than 8,000 borrowers across ten countries.  Our experience over the past four years is that as their loans are repaid, lenders invariably re-lend; rather than withdraw their money. While lendwithcare has proven to be very popular with supporters, is it an efficient way for MFIs to access funding?

The obvious attraction for MFIs is that they do not have to pay any interest whatsoever on the capital they receive from lendwithcare. Although some MFIs are permitted to accept savings, most of our partners are legally prohibited from accepting deposits. Therefore, in common with many other MFIs, they must rely on external loans to finance their lending. Typically, they access capital from Microfinance Investment Vehicles (MIVs); these are specialist microfinance investment investors such as Blue Orchard, Oikocredit, Triodos and responsAbility, and from local commercial banks. Both these categories of lenders charge interest on their loans, although the MIVs typically charge lower rates than commercial banks and some also provide technical assistance and expertise.

Although lendwithcare does not charge any interest, the funding we provide is not cost free for our MFI partners. This is because they have to visit borrowers, collect details regarding their businesses, take photographs, upload all this information onto the lendwithcare website and then provide further updates on borrowers’ businesses. If the MFI’s clients are living in isolated villages spread over a large area then the administrative obligations associated with participating in lendwithcare could be considerable. This could mean that any benefits arising from interest free capital might be negated by an increase in operational costs. This raises the question, might it actually be cheaper for MFIs to simply access capital from the MIVs and other commercial lenders, even though they have to pay interest, than from lendwithcare?

During a recent visit to Cambodia, this is a question I posed to the Cambodian Community Savings Federation (CCSF) who have been working with lendwithcare for the past three years. CCSF works with rural clients, mainly rice farmers, in the provinces of Battambang and Banteay Meanchey in North West Cambodia. Pisey Phal, CCSF’s CEO, confessed that while they do access loans from several MIVs they prefer funding from lendwithcare because it is much cheaper for them.

Lendwithcare Entrepreneur with CCSF loan officer © CARE/Nancy Thomas

Pisey mentioned that during 2013 lendwithcare provided CCSF with US$416,000 to fund loans to more than 500 individual borrowers as well as a small grant to help with administrative costs. CCSF used the donation to cover the salary paid to one employee who was contracted specifically to work on lendwithcare – the grant just about covered all of his annual salary, although it did not cover his expenditure on fuel and the small amount of time that other staff, particularly the finance manager, spent on lendwithcare related duties. To access an equivalent amount of funding from an MIV or commercial lender, CCSF would have had to pay at least US$32,800 in interest charges, possibly more. Pisey added that lendwithcare funding would still be cheaper for them even had it not received the administrative grant. She added that the greatest advantage of lendwithcare funding is that it provided CCSF with a secure source of funding over a longer period of time, loans from MIVs in contrast are generally for shorter periods of 1-2 years. Furthermore, since loans from lendwithcare are repaid monthly and transfers simply offset against new loans being financed, Pisey mentioned that the exposure to possible currency fluctuations is greatly reduced.

From discussions with lendwithcare’s other MFI partners, they make an effort to ensure that any extra administrative costs are kept to a minimum by integrating lendwithcare duties with other routine operational tasks. For example, our partner in Ecuador, Fundacion de Apoyo Comunitario y Social del Ecuador, requests several loan officers from three branch offices to each collect four borrower profiles every month. The loan officers estimate that lendwithcare adds on average just an extra 1-2 hours to their monthly work burdens – they already visit borrowers to assess the feasibility of their loan application, the only extra work associated with lendwithcare is taking photographs and preparing a narrative for the website.  By dividing extra responsibilities related to lendwithcare between several staff, there is actually only a marginal increase in administrative work.

By Dr Ajaz Ahmed Khan, Microfinance Advisor at CARE International UK

Guest blog | Lending: the new giving?

This blog was originally posted on Tim Bishop's definitelymaybe blog and has been re-posted here with his permission. 

 

Vietnamese hill tribe handicrafts © CARE / Tim Bishop

I live in Saigon, Vietnam, and it’s hotting up once more as we approach the muggiest time of the year.

Luckily, for me, this week I have been in Hanoi and luckier still, yesterday spent the day visiting local hill tribe communities about 180 kms north west of the capital. Not only did the mercury drop down lower for the day, as we snaked our bus round the mountains through wispy clouds and potholed roads, but we were privileged to meet incredibly talented individuals, tucked away as they are from the life of urban Hanoians, and cut off from the collective consciousness of the world outside Vietnam.

 

The objective of the visit was as part of an expansion of an initiative in the UK that CARE International have built over the past four years, called Lendwithcare.org.

Local Hill Tribe Community © CARE / Tim Bishop

The brainchild of CARE’s former marketing director, Lendwithcare set out to establish an online micro-lending community within the UK, whose members (or “lenders”) are able to loan money to individuals (“borrowers”) in the developing world, to help establish and grow micro-enterprises and small businesses.

The borrowers repay the lenders on a monthly basis, and once the loan is fully repaid the lender can re-loan the same amount back into the system, and onto a new borrower.

This lending cycle can continue for years, and support multiple borrowers.

Lendwithcare now has 17,000 lenders supporting nearly 8,000 borrowers in eight countries (Zambia, Malawi, Pakistan, Togo, Benin, Cambodia, Philippines and Ecuador) and the intention is to expand further.  65% of those lending have so far gone on to make additional loans.

Handicraft Group - painting in beeswax © CARE / Tim Bishop

The initiative offers transparency - as a lender, you can track the progress online of the borrower in which you invest your loan – and also maintains an appeal to a range of audiences (in my family not only did I sign up to make a loan, but my father did also, as did two other family members of ours, both now in their 90′s).

The appeal is simple: Lendwithcare makes your money work very effectively and it also helps include up until now some of the billions of people in the world who are simply looking for the same things in life as everyone else.

As anyone who has ever worked will testify, there are times for all of us when the requirement of a loan to help us move forward are too pressing to ignore. Growing up in the UK, I borrowed money from the bank to purchase numerous things, and the process to do this was typically quite straightforward (often too simple, but that point would require a separate post on the ways and wherefores of the banking system in the UK).

 

Duck and cow breeding © CARE / Tim Bishop

 The plain reality for so many people living in Vietnam, and elsewhere, is that accessing any form of loan – even from family members – is often impossible, and typically those loans on offer might only be obtainable from individual (black market) money lenders, operating with high interest rates.

For the groups I met yesterday, most were made up of women, and they were fortunate enough to be receiving loans from a Hanoi based micro-finance institution (MFI), specialising in lending to remote communities.

And it is via MFIs through which Lendwithcare operates.  MFIs loan money to individuals, usually at favourably low interest rates, however many often lack access to regular and affordable capital, to be able to actively plan long term.

Through Lendwithcare CARE seeks to overcome this issue, offering MFI partners interest free capital as well as giving them small grants in order to cover administration costs, and support staff training.

It is CARE’s aspiration to help grow the outreach of MFIs in a way that also promotes positive social outcomes for borrowers. Which means providing loans not just to grow small businesses (such as breeding chickens and ducks, or selling handicrafts) but also loans to help install toilets and water pipes, loans to carry out house repairs, and loans to help train people in business development skills.

Every borrower we met yesterday could have added further items to their wish list.

Whilst micro-finance does not solve all the world’s problems, what it can do is help address the inequity of the current paradigm.

When I lived in Uganda in 1996, teaching English, the needs and wishes of those in the village I stayed were no different to what I saw and heard yesterday here in Vietnam (itself accredited with being a “middle income” country and economically vibrant after thirty years of positive growth).

In so many ways the world has changed since 1996.  Many of the hill-tribes in Vietnam have mobile networks, many have learnt new farming techniques to improve their yield, or had access to new markets to sell their handicrafts.  More children are attending primary school.

But much remains unchanged.

For many countries in a similar situation to Vietnam, economic growth has not been inclusive of all, and has not addressed issues of gender, nor exclusion for many people from accessing markets, information and resources.  As we saw again yesterday, women still do the brunt of the domestic and the labour work, and access to clean water and sanitation exists only for those households in each commune fortunate enough to have them.

So, is lending the new giving?

Time will tell.  Until then, however, why not take a look yourself at the Lendwithcare.org website today, and become a part of the potential answer.

Loans can be given as a gift voucher to a friend or family member, who can choose which entrepreneur they would like to support. The entrepreneur uses the loan to help grow their business, and later pays the lender back. The lender can either withdraw the money and keep it, or lend the same money to another entrepreneur.

Gift vouchers range from £15 and are available in various designs, which can be sent via email, downloaded and/or printed. They are available at www.lendwithcare.org/gift_vouchers.