I had the honor of meeting with some of the staff of Mentors International this week. They contacted Today’s Mama about doing a blog (or two) for them about an upcoming fundraiser (more on that later). As I talked with Susan and Adriano, it was obvious that they have a passion and heart for service.
Mentors International is a non profit organization that gives microcredit (a loan usually in the amount of $100 – $150) to a qualifying individual. One of Mentors International’s slogans is A Hand Up – Not A Hand Out. They support self reliance through microcredit and education. Many of the hardworking poor in developing countries—often illiterate—become entrepreneurs by default. To qualify an individual must have some type of business for at least one year and has to be living in poverty. The business also has to be their main source of income and they must live in the area where their business is located. The business could be selling tomatoes from your front porch, making and selling tortillas, doing hair or making and selling hand made crafts. Individuals sign a contract that the funds will only be used to grow their business and repayment is is made in 3-6 months depending on where they live. They have over a 95% repayment rate.
Along with providing the microloan, Mentors International helps their clients with a simple business plan and teach them bookkeeping, marketing, pricing and purchasing principles. In Guatemala, they meet with the clients weekly and put together groups of 5-7 individuals (who are cosigners of each other) that create an accountability and training network. In Peru, they set up what they call a common bank – a group of 15-20 people that are cosigners and provide the accountability and training structure necessary to make these endeavors successful. All groups are overseen by local Financial Mentors that work for Mentors International.
For people in these countries loans, with reasonable interest rates are impossible to come by. People in developing countries who live in poverty don’t have access to banks or collateral. The village loan shark charges very high interest rates on a tiny loan. Hard-earned profits go straight back into the loan shark’s pocket, and people are locked in a cycle of debt payments that leave them with almost no profit to show for their routine 80 hour work weeks. They have nothing with which to expand their businesses and nothing with which to improve their families’ well-being. This harmful lending is common in developing countries.
You wonder how $100 can make such a difference? Microloans enable poor entrepreneurs to:
- Purchase tools and raw materials
- Increase product variety
- Improve product quality
- Enhance productivity and hire employees
- Satisfy market demand
A powerful change occurs when you give someone a chance. People in developing countries take pride when they realize they can end poverty through their own initiative. They improve not only their own lives, but in a widening circle of impact, the lives of their families, their communities, and their nations. Mentors International’s clients move from everyday survival to planning for the future. They improve their businesses as well as their families’ entire socioeconomic standing. Their children eat better, live in improved housing conditions, receive better healthcare, and attend school.
The ripple effect knows no boundaries. For each person who runs a business that generates a sustaining income, an average of at least five others receive food, clothing, shelter, and education. Eventually, the positive impact of one person can lift an entire community. In honor of all of their hardworking Mom’s they are doing a fundraiser.Let’s Pay It Forward This Mother’s Day!