What is MicroCredit?
Microcredit is the provision of small loans to the very poor. The Talent Tree's Microcredit funds are typically given to a group of women in ghana called the Talented women's club.
The Talent Tree has run a microcredit and nutrition program for women in Ghana since 2004. The core of our microcredit fundraising is a direct result of the student's efforts at Copenhagen International School's Charity Club. The microcredit project in Ghana has been so successful that we now have two groups and have expanded the project with a nutrition program. Now, bachelor students from Metropolitan University travel to Ghana to work with the women and their families on nutrition and health issues.
Our fundraising goal for this year is 40,000DKK. Take action - help give these women and their families a chance to develop their way out of poverty!
There are many challenges and concerns involved in establishing and running a successful microcredit project, the primary one being the danger of creating unnecessary and un-repayable debt. This form of loan has increased exponentially in recent years and not all banks or other lenders follow what we believe to be ethical practice. The poor, marginalized and illiterate are sometimes subject to loan schemes that hurt more than help them.
As a non-profit NGO our central concern is not on a financial return on a loan but rather poverty reduction based on a deep respect for the potential vulnerability of those living in poverty. We have carefully gathered experience in the field and developed a microcredit model that has now resulted in giving forty five women and their families a better life.
The Talent Tree guidelines are simple:
Only provide microcredit loans to those who have a clear plan as to how the money will support their business - microcredit for production, not consumption
Interest earned from microcredit loans is left in the fund, giving incentive for repayment while increasing the possibility for larger loans as the fund grows - sustainability is key
Do not take collateral
Establish groups that are based on self selection and trust
Screen members carefully to assure they understand the basics of the program
Develop a competent and trustworthy local leadership to ensure ownership of the project