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For week ended September 12, 1999 Posted 19 Sep 1999

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BYU professor facilitates micro-loans (Loans that beat poverty)

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.

Copyright 1998, 1999, 2000, 2001 Kent Larsen · Privacy Information