Summarized by Gregor McHardy
BYU professor facilitates micro-loans (Loans that beat poverty)
Deseret News 12Sep99 L4
By Jenifer K. Nii: Deseret News business writer
Need a loan? How 'bout $25.00? Where could you get a loan like that, and
who would need it anyway (other than your brother-in-law, and he only
wants it till next Friday).
Well, if you live in Honduras and want to start a business, maybe all you
need is a bunch of plywood to build a roadside stand. Hardly worth going
to the Central Honduran Bank for a line of credit. But that is exactly
what Concepcion Hernandez Martinez needed. So she went to a new kind of
bank and got a loan for about $28. She built the stand. She made a few
bucks. She repaid the loan. She got another, bigger loan, and now owns a
restaurant.
All of this is thanks to a BYU professor named Warner Woodworth who has
devoted his life to a concept called "microcredit lending," where the
poorest of the poor can get a loan, no matter how small. The idea is not
his own. It was pioneered by Muhammad Yunus in Bangladesh where folks
needed money tobuy a cow or make a fishing net. Woodworth echoes Yunus
when he says "People are poor not because they are lazy, not because
they're not smart. They're poor because they lack access to capital. If
you give the poor some small loans, that gives them the possibility to
change their lives and become independent."
This article focuses on a group of 50 students from BYU who, in response
to the devastation of Hurricane Mitch last year, raised funds from their
rich Utah Valley neighbors, and headed down to Central America to divvy
out the money in micro loans--almost all of which are repaid in full (take
that BOA). It also tells of the Utah Microenterprise Loan Fundthat is
designed to provide small loans (up to $10,000) to entrepreneurs who can
prove that they have exhausted all other means for funding. For example, a
Tongan quilt maker found her quilts in demand, but couldn't afford the
$8,500 she would need for the sewing machine to help her automate the
process. UMLF gave loaned her the cash, and now she can finish a quilt 30
times as fast, and is looking to ramp up business even further.
For more information about the Utah Microenterprise Loan Fund, call
269-8408. To learn more about the microcredit project managed by
Warner Woodworth of Brigham Young University, contact Humanitarian
Link at 1-801-434-9530, or call Woodworth at 1-801-378-2664.
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