I’m delighted to present a different type of guest post on my blog today. It’s been written by Lendwithcare, a non-profit microfinance lending website run by the charity CARE International UK. For over a year now I’ve been looking forward to receiving emails from Lendwithcare at the end of every month telling me how much the people I’ve helped previously with loans have managed to pay back and deciding who to lend £15 to now. So far, I’ve made 28 loans and helped 469 entrepreneurs and their family members. I hope you’ll be inspired by this post to lend to business owners that are less fortunate than ourselves.
Lendwithcare is an innovative way of helping some of the world’s poorest people work their way out of poverty. Through Lendwithcare, you can lend as little as £15 to an entrepreneur to help them to get their business off the ground. You get to choose which entrepreneur you want to lend your money to and each profile comes with a photo of the entrepreneur and a background into their business to help you decide. Once the loan has been repaid, you can choose to reinvest your money into supporting another poor entrepreneur or withdraw your money.
Lendwithcare is an initiative of the poverty fighting charity, CARE International UK and currently works in 11 developing countries to provide loans to people who need them most. These entrepreneurs are among the world’s poorest and they’re determined to work hard to get themselves and their families out of poverty. The loans provided by lenders through Lendwithcare make that possible.
How it works
The entrepreneur requests a loan from one of Lendwithcare’s microfinance partners. The loan requests are checked by the Lendwithcare team and posted to the website. Lenders choose who they want to lend to and how much they want to lend. Lenders then receive monthly repayments on their loans.
Lendwithcare checks each loan featured on the website to ensure the entrepreneur’s business is socially responsible, ethical and environmentally sustainable. For example, Lendwithcare will reject loans to businesses that cause environmental damage, or are involved in poor animal welfare such as caged egg production. They also actively encourage businesses that create opportunities for the very poor, promote sustainable agriculture, recycling, renewable energy and energy efficiency.
Identifying an appropriate microfinance partner organisation is a thorough process involving in-depth desk research and visits to two or three potential partners in country. Every partner has to meet Lendwithcare’s eligibility criteria, which are then checked on annual evaluation visits to the microfinance partner. Lendwithcare will only partner with organisations that focus on improving the lives of the poor. The microfinance partner must also adhere to CARE’s code of conduct in microfinance, which includes educating entrepreneurs on financial management, ensuring that child labour is not promoted by entrepreneurs and that loans are not given to unsustainable environmental practices.
100% of the money you lend through Lendwithcare goes to the entrepreneur. Not only do you know who you are lending your money to, but you can be confident they’ll receive all of it. That’s why Lendwithcare relies on donations. Lenders can also choose to become a Lendwithcare Angel and make a monthly donation. These donations help Lendwithcare expand into even more countries and reach as many people as possible.
Lendwithcare launched 8 years ago and now has over 49,000 lenders, who’ve lent £19.3 million to more than 89,000 entrepreneurs. Lendwithcare also has 1,800 Angels giving regular donations.
Why it works
Microfinance is considered a more sustainable long-term approach to helping poor people. It builds on the principle of “give someone a fish and feed them for a day, but teach them to fish and they will feed themselves for a lifetime.” Providing entrepreneurs with a loan through Lendwithcare gives some of the world’s poorest the opportunity to break the cycle of poverty.
Around two thirds of microfinance clients around the world are women. Women in developing countries are usually among the poorest and most vulnerable within society. Providing these women with a loan through Lendwithcare can make a huge difference. Microfinance can significantly contribute to the empowerment of women, and studies show that once women start making more visible economic contributions to a household income, this can lead to a growth in the woman’s status within the household and the wider community. Women are also agents of change within a family and the community. Female empowerment is closely tied with improvement in the health and educational status of families.
Some people argue that microfinance does not alleviate poverty. This is because non-profit charitable organisations are not the only people who provide microloans across the developing world. Some microloans are given by loan sharks or commercial companies whose focus is generating profit, rather than helping people out of poverty. Non-profit organisations such as Lendwithcare have the needs of the borrowers at the forefront and so are more able to help alleviate poverty. That’s why it’s important to consider which type of institution is providing the microfinance before deciding whether that specific microfinance helps to reduce poverty.
Lendwithcare only partners with microfinance institutions that prioritise social development and target low-income populations and isolated rural borrowers unable to get loans from banks or other financial providers. The microfinance institutions that Lendwithcare works with don’t solely provide poor people with loans and credit, they also give them access to other financial services, for example insurance and savings. Lendwithcare’s partners also provide other services such as business management training and raising awareness of malaria and HIV/AIDS. These services give entrepreneurs tools to use their loan in the most effective way so they can change their own lives.
Receiving updates from Lendwithcare on how entrepreneurs are faring is a great way to see your loan in action. And it’s especially rewarding to learn that these entrepreneurs can now afford to feed their families and send their children to school, all as a result of their hard work and a helping hand with a loan from Lendwithcare.
Join the Lendwithcare community!
By making a loan of just £15 at Lendwithcare you can choose an entrepreneur to support and help them work their own way out of poverty for them and their family.
You can also get your friends and family involved! Give them something different for their birthday or Christmas. Lendwithcare gift vouchers (from £15) can be sent by email or downloaded and printed.
Over £20 million has now been lent to more than 93,000 entrepreneurs through Lendwithcare.