Microfinance is an innovative way of making money work.
A loan is made to a woman who wants to start up a business such as tailoring, hairdressing, curtain making or selling firewood in order to pump prime the business.
A small rate of interest is levied and the loan must be paid back over 10 months in order to qualify for further business investment if needed.
The women meet in accountability groups each week to encourage one another, make sure the administrator receives the loan repayments and to share tips on how to make the business prosper. If one person defaults on the loan the others are expected to cover the loss from their own businesses. In this way failure to repay the loan is very unlikely.
The interest charged helps the group administrator cover the costs of time and travel expenses needed to support the women in their businesses. At the end of each quarter the loan repayment is split in a 60:40 ratio between the administrator to cover costs and the remainder of the women in the scheme. This money is used to buy school books and uniforms as well as cooking utensils and given back to the women for their own family use. In this way the men in the family can't spend it on alcohol!
The remainder of the returned money is then reinvested in other businesswomen and the cycle repeats.