Posted November 1, 2010 by Mona Gonzalez in Featured

Giving a ‘hand up’ through microfinance

Mama Flores, a woman from the Democratic Republic of Congo, dreamed of opening up her own beauty salon.

For some people a dream is all it takes, and she was among them. This mother of four children got a loan from HOPE International and sold rice and beans. From her earnings she saved enough money to open her salon, which today employs 15 single mothers and orphans.

Mama Flores comes from a sub-Saharan African nation, in a region where 71.17 million people live on $1 or less a day.

She was a typical woman in one of the most difficult contexts in the world, living in a place where physical and spiritual poverty are at their worst.

Definitely, her profile did not qualify her for any type of loan, Chris Horst, HOPE’s regional representative in the Western United States said.

But hers is the profile that HOPE, a Christian microfinance organization, targets.

Horst said, “HOPE seeks to release people from poverty by giving a hand up rather than a handout.”

Mama Flores can now support her four children, and is helping others out of poverty too. She said, “HOPE gave me an opportunity. Now I’m giving that opportunity to other women.”

Horst said stories like Mama Flores’ is one of the biggest perks of his job.

How Microfinance works

Microfinance is probably the most doable way of helping others who are in the most difficult and at-risk environments. Microfinance has a multiplier effect, too. It generates long term benefits, and what one loans is paid back.

Lenders can give upwards of $10, depending on the microfinance group. Their field people, who are based in the target countries and know the lay of the land, can pinpoint small entrepreneurs who need a hand up but don’t qualify for a normal bank loan. Most microfinance clients are women from third world countries.

The client is given a payment plan that is doable for them. Lapses in payment may incur a small penalty. Oftentimes lenders choose to recycle the loan once it is paid back to another client.

Each microfinance company is tweaked towards its own purpose and vision. Horst says, “While traditional microfinance is effective in alleviating physical poverty, Christ-centered microfinance also seeks to address spiritual poverty.”


Kiva is focused on helping the most destitute people in the most underprivileged countries through microfinance. According to their website, one can lend a minimum $25, and the loan is combined with that of others to meet the client’s need.

Many loans are from Kiva organizations including Kiva Christians, Team Obama, Team Europe, Church of the Flying Spaghetti Monster, and the team Atheists, Agnostics, Skeptics, Freethinkers, Secular Humanists and the Non-Religious, among others listed on their site.

Kiva Christians has some 4,500 plus members and has raised some $1.3 million total for multiple beneficiaries in Rwanda, Paraguay, Cambodia, Uganda, and Bolivia among others.

As of this writing Kiva’s home page features a 50-year-old Ugandan woman who three years ago started a cattle selling business. Her earnings allowed her to provide education for her seven children. Now she is applying for a new loan of $2,275.00 to buy thoroughbred cows for resale. Thus far 75 percent of the loan has been raised cumulatively.

Mama Atiya, from the Democratic Republic of the Congo, was able to open a smoked fish business with a loan from HOPE International. Credit: HOPE International

Catholic Relief Services

The website of Catholic Relief Services says, “We alleviate suffering and provide assistance to people in need in more than 100 countries, without regard to race, religion or nationality.”

Aside from microfinance CRS is involved in community health, conflict and peace, emergency aid and others, all done based on Catholic principles emphasizing human dignity.

Their website cites the project Bridging Small Farmers to the Jollibee Supply Chain in Mindanao. Jollibee is the Philippines’ No. 1 hamburger chain, but their need for onions exceeds local supply. Some of their onions were purchased overseas which was expensive.

CRS noted that many Mindanao small farmers grew corn and competed with each other. By linking the small farmers and training them to plant onions at Jollibee’s quality standard, the farmers were able to meet 10 percent of the chain food’s supply requirements.

Because the farmers banded together they could bargain for a better price. Because the onions were locally purchased, Jollibee paid less than they would have cost overseas.

One farmer earned only $4.34 from 100 square yards of corn. The same land used to grow onions earned him $130 per 100 square yards.

Christ-centered microfinance

Peter Greer, president of HOPE International once said that Christ-centered microfinance “free[s] men and women to become the people God created them to be, not encumbered by the burdens of poverty but entirely free to worship God through their work, and to use the gifts He has given them to reach out to others in their communities.”

Horst said, “Our Christ-following loan officers can build relationships with clients and share the hope of the Gospel even as they distribute loans. We believe this holistic approach is the most effective way to produce genuine and long-lasting change in people’s lives.”

Horst adds that microfinance has been underutilized by Christians, misinterpreting the verse, “The poor you will always have with you,” in Matthew 26:11 to mean that church funds shouldn’t be used to address poverty.

But Mark 14:7 adds, “…and you can help them anytime you want.” Horst says, “Jesus seems to imply that helping the poor should be a part of His followers’ everyday lives.”

The spiritual component lends completion to one’s income. Citing a BBC report, Horst noted that with India’s spike in wealth, there was the ability through ultrasounds to know a child’s gender in the womb. Girls are viewed as a financial burden, and some 10 million female fetuses were aborted in the past decade. But God values all children male and female equally.

By contrast he cites the case of a HOPE client in Rwanda who raised a few cows for a living. One of her cows became diseased, and for fear of losing her investment she thought of bribing a local butcher so the meat could still be sold.

Before doing so she attended HOPE’s biblically based business training seminar, the topic of which happened to be business ethics. She confessed what she was planning to her group mates and in this way, did not make a regretful business decision. Microfinance is about small business, but with HOPE one values small choices too, many of which can have huge consequences.

Horst said, “At HOPE we emphasize heart change as well as life change.”