Lending Examples

You may choose to lend to a regional Microfinance Institution, who will then distribute your funds to a number of independent Village Banks who will then decide how to utilise the funds received.

This is the safest form of lending and is also most suitable for larger amounts, not only because the risk of default is diluted among a large number of end users.

You may also select a particular Village Bank which then decides how to allocate funds among it members. Typically Village banks consist of 20 - 30 group members and require loans of between £3,000 to £6,000. They may have a particular focus, for example in handicrafts or farming.

Arteaga is a very sucessful Village Bank in Papaluapan with 25 members. Their activities vary from small vendors through bakeries to production of small instruments for gardening.

The bank is asking for a loan of about £5,000

You can also lend smaller amounts to specific individuals. The loans requested tend to be in the region of about £300. Obviously this gives the most direct relationship with the end user. On the other hand if you are unlucky enough to pick a particular borrower who doesn’t meet their repayments, then you could suffer a greater loss as a proportion of your investment than if you had spread the same amount between a number of borrowers.

Galdina Hernandez, Mexico

Galdina, as well as her colleagues from the Village Bank Monte Alban sells milk, cheese and poultry at the market place Etla, close to Oaxaca town.

She is asking for a loan of £375

Ingris Rosas Perez

Ingris Rosas Perez is a member of Village Bank Jafra, as her daughter is. Together, they work in their own retail store. She is asking for a loan of £160 to purchase goods.

Correa Velasco Roxana

Correa Velazquez Roxana is president of the Village Bank Yabacu. Besides the group credit, she needs more funding, that she will inject into her poultry business.

She is asking for a loan of £470