Guest blog | You don’t have to wait for Christmas!!

This blog was originally posted on Richard Kemp's blog and has been re-posted here with his permission.

Pictured above is Ghulam Qadir who has a recycling business in Pakistan

I have to admit that I am not an easy person to buy things for at Christmas and birthdays. I am lucky that I can afford to buy things that I need and have very few things that I want to buy on top of that except for stamps (I am a stamp collector).

So I always present a challenge. However my ever resourceful younger daughter Rachel, currently the Lady Mayoress of Liverpool, knows my foibles and my interests and is a dab hand at whizzing around on her computer looking for things.

In the past she has bought me things like goats from Oxfam which I have appreciated but it felt a bit sterile. I like being involved with things. This year she found a perfect present when she gave me a voucher for Lendwithcare. In this she combined two of my interests.

Professionally I used to be a regeneration adviser helping people set up programmes to help small business in some of the most deprived parts of England and in places like Turkey.

Politically I represent the UK on a number of international local government bodies and have had the opportunity to visit villages and towns in Africa to see at first hand the hand to mouth existence that so many of the people of Africa and similar areas face.

From the start I was delighted with the gift and within a couple of days invested most of it. I have since put two more small amounts in and intend to give small amounts on a regular basis.

I like thinking about which countries and people to invest in. I don’t put money into retail businesses but prefer to put them into things like recycling, food production and farming. I like the feedback that I get from Lendwithcare and to see the relatively small amounts dribbling in monthly. This means that I know that Lendwithcare is investing well although I do expect that sometimes it will not work out and the investment will disappear.

I have currently made two investments in Pakistan and one each in Benin and Cambodia. Two of the investments are with men and two with women.

To me this is what Christmas is all about. I don’t need another tie and although I will always eventually eat another bar of chocolate doing some small things for people in far greater need than I have ever experienced gives me a small glow of satisfaction. So thanks Rachel for leading me to Lendwithcare. You know what Santa can bring me next year don’t you!?

But you don’t have to wait for Christmas. If you go onto their website you can sign up and start lending straight away  http://www.careinternational.org. Alternatively ring them on 0207 091 6014. Lend some money, do some good and have a pleasurable learning time as well. You could even become a Lendwithcare angel – probably the only chance that I will ever get of acquiring a pair of wings! If you come from Greater Liverpool you can also join a group and see what other members (there are currently four of us) are doing and investing in. I don’t want to urge you on too much but Manchester has a bigger group than Liverpool – a situation I would really like to see rectified!!

National Ethical Investment Week | Six reasons why a lendwithcare.org microloan makes a good investment

As National Ethical Investment Week (NEIW) 2013 draws to a close and people within the sector call for “bigger, bolder, broader and better”[1] ethical investments from the UK, I have been thinking about how and indeed if, lendwithcare answers this call to action?

© CARE/Emilie Bailey

Lendwithcare enables people to lend from as little as £15 to entrepreneurs running their own businesses in developing countries. 100% of the loan goes directly to the entrepreneur. Entrepreneurs range from fish farmers in Cambodia to beauticians in Togo. The entrepreneur uses the loan to grow their business and support their family, and later pays the lender back. When their loan has been repaid, the lender can withdraw the money and keep it, or re-invest the money in another entrepreneur and help kick start another business.

Essentially it does. After all, NEIW aims to let people know they have 'ethical and green options when it comes to their financial decisions' – that everyone, not just rich philanthropists, can use their money to make a difference. Lendwithcare certainly lets people do this. However, NEIW also aims to let people know they can make a difference and make money. And it is this additional dimension that, although significant, is where NEIW contributors and lendwithcare lenders differ – while you won’t earn any interest on your loan, the vast majority of cases you get your money back in full and on time – unless of course one considers a warm, fuzzy feeling a ‘return’ on your investment.

Which leads me back to my original question: Does this lack of financial gain mean lendwithcare is not a smart investment? Of course not. Below are six reasons why an investment in a lendwithcare business, makes good money sense.  After all lendwithcare loans:

1. Create employmentand contribute towards building sustainable livelihoods in poor communities around the world. Affordable financial services are central to addressing poverty and your investment will help build the capacity of Microfinance Institutions (MFIs) to help the poorest earn a living, grow their businesses and create new jobs.
2. Affordable: Investments start from as little as £15 but those with more cash to spare can lend  the full loan amount required. 
3. Return: Repayment rate on lendwithcare is 99.97%[2] and although we do not offer investors more than their initial investment back, there is always that added ‘warm, fuzzy feeling’ I mentioned earlier. 
4. Ethical: Lendwithcare is an initiative of humanitarian and development charity, CARE International UK and your investment will be used entirely for the benefit of the poor. Lendwithcare only partners with MFIs that have a strong social development mission and promote microfinance as a means to improving the social and economic conditions of poor people and their families. The MFIs we work with also promote and invest in social businesses in the communities they serve. 
5. Unique: Investing directly in a lendwithcare entrepreneur and their business is an innovative way to do something good with your money and let’s face it, with saving accounts offering such low rates of interest it’s not doing much good anywhere else at the moment! 
6. Knowledge, experience and expertise:  CARE International has been active in promoting microfinance throughout Asia, Africa, Eastern Europe and Latin America for more than two decades, so you can be sure that your money is being invested sensibly and expertly.

So join me in #makingmoneygood this National Ethical Investment Week and sign-up to lendwithcare.org!

 

If you sign-up and get two friends lending through our share page before midnight tomorrow (Friday 18^th of October) you could win an iPad mini www.lendwithcare.org/share

By Nancy Thomas, Lendwithcare Executive 

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[1] http://blueandgreentomorrow.com/reports/the-guide-to-national-ethical-investment-week-2013/

[2]Lendwithcare was launched by CARE International UK in September 2012. Since then there have been two defaulted loans and this was sadly due to the two entrepreneurs in question passing away.

Why are some microfinance loans not so 'micro'?

When asked recently by a lender why many of the loans featured on the lendwithcare.org website were rather large (often around £1,000) we explained why that might be:


1. At lendwithcare we believe that supporting small to medium enterprises (SMEs) often generates waged employment opportunities for some of the very poorest segments of the population. The latter occasionally do not even qualify for a microloan in their own right. This strategy of supporting a range of businesses we believe is more effective in tackling poverty than simply supporting one type of business.

2. We very carefully select the microfinance institutions (MFIs) we partner with overseas and believe that all of our partners, in addition to providing important financial services to their clients, have a very strong social mission and therefore we aim to raise loan capital through lendwithcare to support a true representation of the businesses they support (which include slightly larger loans). By doing this we enable our partners to free up loan capital and concentrate on serving those in more remote, and often poorer, areas.

3. Smaller loans tend to get funded very quickly on the lendwithcare website and it is often the case that a small loan will be funded within a couple of hours, leaving the larger loans to become more visible on the website, like this loan from the Philippines for example http://www.lendwithcare.org/entrepreneurs/index/4361. In reality the average lendwithcare loan is still in fact 'micro' at £567.


 
The aim of microfinance is to provide basic financial services (be it loans, savings, insurance or money transfer facilities) to those that are typically socially and/or economically excluded from the formal financial sector. And it is true that microfinance clients are overwhelmingly poor and tend to live in developing countries. However they are by no means an homogenous group of people. And as such, the microfinance services they require are wide-ranging and diverse too.


If you would like to read more about the debate on supporting microbusinesses or SME's, please read the blog Ajaz, our Microfinance Advisor, wrote about this topic http://lendwithcare.blogspot.co.uk/2011/12/microcredit-and-job-creation.html

 Nancy Thomas, Lendwithcare.org Executive

Lendwithcare.org supports important green initiative in the Philippines!

We have added our first sustainable social enterprise loan to the lendwithcare.org website to help tricycle taxi drives to acquire cleaner engines for their tricycles.  We are supporting an initiative launched by our partner in the Philippines, SEEDFINANCE and a local company called “Clean Engines Incorporated” (CEI) to help reduce air pollution in Metropolitan Manila.  This initiative aims to encourage local tricycle taxi drivers to switch over from two-stroke petrol and diesel powered engines (highly pollutant) to environmentally-friendly liquefied petroleum gas (LPG) engines.

In the Philippines 84% of the country’s population depends on tricycles (similar to rickshaws) for transport. At present, 70% of these tricycles have polluting two-stroke engines. This has a devastating impact on the environment as well as on the health of urban residents.

The local council of Mandaluyong City in Manila has  recently enacted legislation requiring all tricycles to switch over to cleaner liquefied petroleum gas (LPG),  which is undoubtedly beneficial in the long-term, but in the short-term is expensive  (sometimes unaffordable) for tricycle taxi drivers.
This is where lendwithcare and you specifically come in! We are going to help to make this happen.   For the first time, our microfinance partner (and not an individual entrepreneur) is requesting a large loan of $25,000 US Dlls to provide smaller loans of $500 to 50 motorized tricycle taxi so that they can pay for their vehicles to be switched over to LPG without crippling their livelihoods.

The loans are to be provided through a local financial co-operative called “The Rizal Technological University Employees Multi-Purpose Cooperative” (RTU-KMPC). The loans will be repaid over 18 months.  The RTU-KMPC will require tricycle drivers to become members before providing them with a loan to purchase the LPG toolkit that enables the change. Once the kit is installed, air pollution is significantly reduced but also tricycle drivers spend less money on fuel. As members they will also be entitled to access other financial and non-financial services of the co-operative and also share in its profits.
 

The various parties involved, SEEDFINANCE, CEI and the RTU-KMPC are liaising with the Mandaluyong City local government not only to stress the environmental and fuel efficiency aspects of the switch from diesel to LPG, but also to assist local tricycle drivers to pay for the change. CEI will provide training to LPG toolkit users, provide warranties and establish several maintenance shops throughout the city. The aim is to eventually extend the project and provide loans to more tricycle drivers and make Mandaluyong City a cleaner, less polluted and more pleasant place to live and work, and hopefully a role model to other areas in Manila and other cities in the Philippines.

To read more about this fantastic initiative and to support tricycle taxi drivers click here