In the interest of sharing what I've learned, I'll post over the next few days notes from workshops, addresses and sermons. Here's the first:
Economic Development Ministries; Don Durham (President of CBF Foundation); CBF, Charlotte, 6/24
CBF is supporting microenterprises as one option among others within its investment portfolio for their constituents.
Microloans use local relationships to secure loans, not traditional collateral. Most microfinance loans are for 6 months. Group of 5: 2 get loans with others as co-signers. Other three cannot get loan until first 2 are paid back. There is mutual encouragement and accountability. Once paid back, 2 more of 5 get loans. Once these are paid back, final person who originally organized group gets loan. This has 98% repayment rate. Safer to lend to entrepreneurs in underdeveloped world than to those who are listening to him in this workshop.
$1000 loan amount will yield 4 loans of $250. In 1 year, that equals 8 loans, figuring loan timeframe is 6 months. Microfinance is single best chance to escape poverty. Average microloan affects 4 people. $1000 affects 32 people in a year. Money is used but not spent. Interest free loans and non-subsidization lead to self-sufficiency.
Mentioned Phil Smith’s A Billion Bootstraps is a personal testimony from this wealthy man seeking the best return on his giving to charity. The Poor Will Be Glad is his assessment of how microfinance works and why it is effective. Smith is a believer.
Delta Jewels in W Helena AR is an example of microfinance in US. CBF does this.
Chalmers Institute (chalmers.org) helps understand the difference between sustainable ministry and handouts.
Microfinance goes with economy of scale. Some loans are larger and longer. The model is to qualify for small loan and then work up. Mix market (mixmarket.org) rates microfinance loan groups so that givers can do so effectively. Developing World (developing-world.org) also has resources for this.
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