MICROLENDING- the seed is sown!

THE IDEA

My trip to Tanzania in the summer of 2024 left me in awe of the country—its people, wildlife, and natural beauty were unlike anything I had ever experienced. Along the way, I met many wonderful people, including members of the Sukuma and the Maasai tribes. 

Despite the country’s rich natural resources and booming tourism, the local economy remains impoverished for most Tanzanians. Lazarro, our safari driver and friend, shared that most safari companies in the Serengeti are foreign-owned, with only a handful being locally owned and struggling to compete. He dreams of starting his own safari business with just one van but is held back by high bank interest rates that he cannot afford to repay.

During this trip, I also visited the Kambarage Primary School near Serengeti and was struck by the sight of aound 60 students packed into cramped 15’x20’ classrooms. Many wore torn uniforms, and some carried their books in hand. Although the school had a kitchen providing free lunches, it was limited to those below the poverty line, leaving out many other needy children. The school also didn’t have soccer nets, so the kids used bricks as goalposts.

Our balloon ride pilot, Mr. Pradeep Durgam, who had left a lucrative career as an investment banker in London after graduating from the London School of Economics, shared an inspiring story during our bush lunch. When I showed him the photos I took at Kambarage School, and he saw my eagerness to engage with the community, he introduced me to the concept of microfinance. And thus, the seed for my microfinance club was sown!

MICROLENDING 101

Background: Microlending is a concept pioneered by Nobel Laureate Muhammad Yunus. It allows small business owners, who don’t have access to banks or the collateral necessary for traditional loans, to borrow a few hundred dollars to start/grow their businesses. 

Microloans are an effective tool in breaking the cycle of extreme poverty, offering opportunities for individuals from underserved communities to generate sustainable income and achieve financial stability. 

Objective: Microlenders’ main objective is to improve the lives of people and create a financially inclusive world, NOT to make profit. With a repayment rate of 99%, lenders can expect to get all their money back, with minimal risk of loss.

Microlending nonprofit organizations connect borrowers and lenders through their platform where loans can be made and repaid. Kiva, a U.S.-based organization, supports people worldwide, including in Africa and South America. Kiva will be our lending partner handling the disbursement of loans for our club. Members can manage and track these loans online using Kiva’s interactive website: https://www.kiva.org/.

Why loans?

There are about 1.7 billion people around the world without access to traditional finance and are ‘unbanked’. By crowdfunding small amounts, called micro loans, we can help borrowers build the life they choose with dignity. This is different from charity and the lenders get repaid. A typical loan is a mere couple hundred dollars. However, larger microloans are becoming a reality as more people and organizations come forward to lend or donate. Nonprofit microfinance organizations like Kiva ensure interest rates are minimal and follow fair lending practices.

Who are the borrowers?

A typical borrower is a rural farmer in Indonesia, a fruit vendor in Peru, or a budding safari driver in Tanzania. Here are two real stories of people whose lives have been improved through Kiva's microloans.

THE CLUB

At the beginning of 9th grade on Sept 2nd, I founded the MicroLending Club in my school with a membership strength of 46 students.

PURPOSE: To support impoverished communities through microlending while giving students like me, a powerful experience with philanthropy and microeconomics at a young age.

OBJECTIVES:

·        Empower small business entrepreneurs in underserved communities: Provide small loans to underprivileged entrepreneurs, like across the world, helping them grow their businesses and improve their lives.

·        Philanthropy: Donate regularly to Kambarage Primary School from the club’s surplus funds (from donations) to help cover small expenses.  

·      Global citizenship: Understand global issues and take responsibility for the well-being of people worldwide. Create awareness about predatory lending practices and become a change agent by partnering with microfinance organizations such as Kiva.

·      Leadership development: Foster decision-making, and financial management skills among members through active participation and responsibility within the club.

·       Create legacy: Establish a lasting microfinance movement at school and beyond, empowering future students to carry it forward.

  C  Fund raising: Raise $5000 by end of school year from local businesses, corporations, friends and families for philanthropy and meeting club expenses.

T    THE LEADERSHIP TEAM: Takes a village!

       President & Founder: Rishi Mishra

       Responsibilities: Oversees all club acitivities and ensures goals are being met.

V    Vice President: Kenan Adams

       Responsibilities: Coordinates committees and Club activities, sets agendas, provides direction.

      Treasurer: Stephen Prakash

      Responsibilities: Manages club's finances, including budgeting and book keeping.

Tr  Secretary: Noraiz Syed

      Responsibilities: Ensures effective communication within the club, including managing emails and announcements.

      Community Outreach Chair: Zach Kahn

      Responsibilities: Builds relationships with external organizations to create opportunities for collaboration.

      Membership Committee Chair: Takudzua Muvezwa

      Responsibilities: Responsible for recruiting new members and maintaining engagement with current members.

      Events Committee Chair: Atlas Long

      Responsibilities: Plans and coordinates club events, such as fundraisers, workshops, and social gatherings.

 

F