We take a lot of things for granted in the west, one is the availability of a bank account and getting short term credit from a lender.  But when you cannot get access to these, it becomes incredibly difficult to escape poverty.

The Grameen Bank, a pioneer of micro-financing in Bangladesh identified the top causes of being trapped in poverty as

  1. no understanding of financial matters
  2. no support from your peers or community
  3. no history of credit
  4. unaffordable credit [high interest money lenders etc]
  5. no access to a savings account to build assets

So the Mia Fratino Foundation has followed these principles and added a few extras to help break the cycle.

All our entrepreneurs have to undertake basic financial training led by a local officer.  These field officers have no access to the funding or distribution of monies so as to eliminate the possibility for corruption.

Then every month they all come together as a group and share their experiences and receive additional support.

Each women applies for a loan up to LKR25,000 for her project. This micro-loan is then required to be repaid back into the central fund in small installments. The only requirement is that the loan is repaid within 12 months, which then creates a ‘Credit History’ for the entrepreneur.

There is Zero % interest charged on the loan. This is unheard of within their communities and is designed to break the crippling effects of interest burden on business success.

To create a real change in their lives, the Foundation created a Savings Plan to encourage a culture of saving.  For every LKR200 an entrepreneur deposits per month, the Foundation pays a 5% per month reward on the principal amount. This equates to a 32% return at the end of the year on her savings plan and acts as an incredible incentive to be financially responsible.

11 February 2016 – What a wonderful day. Finally after so many months of planning, meetings, visits to villages, we had a special Giving ceremony with our first eight women ‘village entrepreneurs’.

mia fratino foundation

I have no doubt that this is the easiest part of the project, because now we have to make sure that all their plans to achieve financial independence are going to happen.

These are not grand corporate ideas, these are small but really significant plans that are going to make a difference. One woman is buying a sewing machine so she can start making clothes for the local market and also do alterations. Another woman is buying supplies so that she can pot plants from her flower bed and sell them at the market.

It may be hard to understand, but these women are unable to raise enough money to buy even the most basic items.  Their lives can be unbelievably hard and yet they have such beautiful dignity.

So it was quite a challenge in the beginning to make sure everyone clearly understood the aim of the Mia Fratino Foundation.  Most people are used to the idea that charities will simply hand out ‘free money’.   So I needed to explain many times that the Foundation was following the old ‘Fishing’ truism – ‘give a woman a fish and she eats for a day, teach her how to fish and she eats for a lifetime’.  We really want to break the cycle of handouts which only solve short term problems.micro finance loan

So we made sure that each woman really thought through her plan and that it was realistic and achievable because we want them to succeed and become fabulous role models for other women.    We hope that within 6 months we will have a second group of ‘entrepreneurs’ ready to start.

But for now the hard work begins to make sure we all learn ‘how to fish…