Honor Mom’s By Helping Moms

Watch as a microloan helps Virginia expand her small business and better provide for her family.

Your gifts to ELCA World Hunger support Virginia Quispe’s family and families across the United States and in 60 countries worldwide. For more information, visit http://www.elca.org/hunger. Join us as we honor moms by helping moms today!

About 1.4 billion people in the world (approximately 20 percent of the total population) live in poverty – meaning that they live on less than $1.25 a day.1 For many of these individuals, their experiences with poverty or continual financial insecurity have a significant effect on their health and well-being. Inconsistent access to jobs or to stable income affects the ability of individuals and families to meet their needs of food, health care, education and even clean and safe water, making the cycle of poverty even more difficult to break. However, once an individual has a source of sustainable income they may be better able to allocate time and energy to meet their basic needs. Sustainable development is a part of ELCA World Hunger’s comprehensive approach that seeks to move beyond relief and helps create long-term solutions for those most affected by hunger and poverty. A portion of donations to ELCA World Hunger supports the development work of microloan programs that help individuals and families access opportunities to create sustainable sources of income. By donating funds that support microloan projects, you can help families get a fresh start or grow to reach their fullest potential in their communities. This money can be truly life-changing for families who receive it. These loans are either interest-free or below-market interest, and once they are repaid they grow the pool of funds. This allows for the microloan projects to fund loans for other individuals and families in need. In this way, an initial donation stays and is multiplied within a community.

About Microlending: Microlending, also sometimes referred to as microcredit or microfinancing, is the process of distributing and managing microloans. As the name suggests, microloans are small loans often given to people experiencing poverty who do not have access to standard credit or regular banks. A majority of recipients are women. These loans are used to start or grow a business and help people achieve more financial stability. Microloans usually fund businesses in the arenas of commerce, food production or sales of services or crafts. Many microlending projects require loan recipients to become part of a lending group. Often each group member contributes a certain amount and the fund is loaned to one member. Once the first member pays back the loan, another group member receives the funds, and so on. These loans help recipients strengthen their self-esteem, business skills and decision-making skills. In some cases, loan recipients take part in business education, training and financial counseling before receiving a loan. These additional steps help individuals have the tools and skills they need to use their loans most effectively. Of course, a lot depends on the structure of the microloan program and its management, because it may not be enough to look at repayment rates alone to determine the efficacy of a microlending model.1