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.