What are your flexible repayment options? The rigidity of many micro-finance institutions (MFIs) is
not in sync with the reality of lives of the poor. At Zawadisha, our loan
recipients can choose how and when they repay their loans, just like many of us
do when we decide between sending a check or making an on-line payment. Our
loan recipients can decide 1) how they pay—via direct deposits into our bank
account or via M-Pesa (coming in 2013); 2) when they pay—by the 1st, 15th
or 30th of each month, for example; 3) the frequency in which
they pay—monthly, weekly, bi-weekly; and 4) when they begin repaying their loan, which is critical for women whose businesses are in the agricultural sector. We believe that this flexibility reduces
some of the stress often associated with micro-lending and allows women more
ease in making often difficult financial decisions.
Tell me more about your matching savings program. Lack of savings can thrust a family deeper into poverty when an illness or death occurs. In the case of education, it can mean the difference between children attending school or not having enough money to cover school fees, books, and uniforms. Our savings program encourages women to save and rewards them for making this often difficult decision (why save today when you may need those funds for food next week?). We will match up to a certain amount—between $5 and $25—that each woman voluntarily deposits. Deposits are held cost-free —quite the opposite of most banks—and will be accessible once the loan is repaid. (If the loan is not repaid at 75 percent or more, these funds will be applied to the principal of the loan.)
What incentives do your members receive? Taking on the responsibility of running a business—regardless of size and revenue—is not an easy feat in any region of the world. We firmly believe that people—especially women living in poverty—should be rewarded for taking positive and proactive steps to improving their living conditions. We also recognize that many things can get in the way of making a loan payment—things that we take for granted such as choosing between food and clean water—and incentives can help to mitigate obstacles while also providing a positive “nudge” in the right direction. We provide savings matches and also work with individual regions to identify the most needed preventative measures we can help support, such as mosquito nets and water filters for safe drinking water.
Why do you provide items such as mosquito nets and water filters? Illnesses—especially those that are deadly—have a significant impact on the ability of a family to focus their energies and finances on the things that can actually support them on productive endeavors. When men, women and children aren’t sick, they can attend school, go to work, and spend money on food and books rather than costly medicine. Mosquito nets help to prevent malaria, and a child who grows up malaria-free earns 50 percent more per year for his entire life. Water filters disinfect water, makes it potable, and thereby reduces the chances of contracting a water-born illness. We believe that the real question is: Why wouldn’t you provide these cheap and life-saving items to families?
How is Zawadisha unique? We are smaller, allowing us--and our supporters--to build deep relationships with our borrowers. Because we are not a traditional MFI or bank, we have the flexibility to implement innovative solutions quickly, monitor our success (and failures), and continue or correct our course as needed. We believe that investing in human capital is just what women need to live more prosperous and fulfilling lives, and provide an "intelligent" solution to poverty that integrates education, loans, savings, and goods/services that impact our members' daily lives. When you support Zawadisha, you do more than provide a loan for a small business—you provide a suite of resources that are critical to improving the lives of women and their families. And you join a network of closely connected and supportive women around the world.