Microfinance

What is it?

• Providing very poor families in the world with small loans to give them advantage

• Use the loans for small projects or to advance projects already in place

• Example projects = making bracelets or providing a community phone

What is Expected of the Clients?

• To have a project

• To repay the loan on a weekly basis with interest charged (much lower than other from a bank)

How does the client benefit?

• Are able to qualify for loans they wouldn’t get elsewhere

• Allows them to finance projects to earn them money

• Provides a support system for these poor families

Does it work?

• Yes!

• Microfinance loans are re-paid in 6 months to 1 year usually at a rate of 95-98% re-paid

• When re-paid the money is recycled to give to other people

Success Story

• Sophia Nalujja has been a successful borrower from UWFT for many years and is currently on her fifth loan cycle. Married with seven children, she runs a small eating establishment in the village of Kiwangula in the Kayunga district and also sells fish. Before joining UWFT, she worked as a farmer earning approximately $27 per month. Through all of her business ventures, she now earns more than $38 weekly. To market her Village Phone business, she has posted signs in nearby villages and has visited local schools to inform them of the services she offers.

Who Invented the Concept?• Professor Muhammad

Yunus • Began in 1976 as a

research project in Bangladesh

• Was so successful they began the Grameen Bank

• Grameen = village in Bangla

• Muhammad Yunus won the Nobel Peace Prize in 2006 for his work