What is a Micro-Credit?

Micro-Credit are programs that extend small loans to very poor people for self-employment projects that generate income allowing them to care for themselves and their families

 

Project objectives

Long-term objective:

.To stimulate sustainable economic development at the grass-root level.

 

Short-term objectives:

.To assist the urban poor to generate their income and survive the economic crisis.

.To assist small entrepreneurs and people working in the informal sector(  small tailor shop, vegetable vendors, women selling  snacks and ready-made clothes…ect) in strengthening their business and learning to manage a loan.

.To  improve the local economic situation condition and develop a community of self-reliance.

 

Type and method of assistance

A sum of money is given as a loan to a small entrepreneur or an individual working in the informal sector to be used as a capital to support his/her business. The amount of money varies according to the type of business and the individual ability to return the loan. This loan without interest has to be returned during a period of twelve months. The repayment of the loan will start on the third month, giving him/her a chance to gain some profit before starting the repay the loan. This means, the sum of money to be paid back every month is 10% of the loan.

 

The nature of the project should remain social at grass root and not rigidly structured to allow changes and adaptation to local needs.

 

Criteria for project beneficiaries

There is an exclusive focus on the poorest of the poor. Exclusivity is ensured by:

1. Establishing clearly the eligibility criteria for selection of targeted clientele and adopting practical measures to screen out those who do not need them.

2. In delivering credit, priority will be increasingly given to women.

3. The delivery system is geared to meet the diverse socio-economic needs of the poor.

 

To be eligible for this project the person needs to meet the following criteria:

 

-Residing in the project site/district

-Having a small business that has been running for a year or two or has experience running    small business.

-Having a low income and  living in a poor condition.

-Showing strong motivation to improve his/her business.

-Reliable and strongly committed to pay back the loan.

-Very small loans given without any collateral.

-Each person is to receive a loan for no more than two times.

-The second loan can only be given when the payment of the first loan is completed.

-The second  loan will be paid back eleven times over a period of 13 months, each time 10% of the loan. This mean, the person pays an interest of 10% for the second loan.

 

Project manager/implementer(s)

 

The following criteria are used to select individual(s) managing this project:

 

-Knowing quite well the people living in the district.

-Having worked with the local community members in various activities.

-Showing a leadership character.

-Being well known and respected by the community members.

-Accountable and motivated to help the poor.

-Capable of making reports.

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Project implementation

The  project was started by looking for a person meeting the set criteria for project manager and “             “ was/were selected for the job.

 

As the  Board members of  Doxa  reside in the United States of America, the management of this mini credit is totally trusted in the hands of the project manager(s) with the oversight of the Board.

 

The selection of participants is made by the project manager(s). When a candidate agrees to all the conditions and rules of the project, he/she will submit a proof of identity to be attached to monthly report card. The submission of some ID cards will help to increase the participant’s commitment to follow the project rules.

 

The amount of  money given as a credit varies by activities or type of business. The participants should come to the house of the project manager(s) to get the loan and and pay back the loan on a specific date and time. By coming together, the participants are able to share their experience in running their business and strengthen the social contact among them.

 

Founding of the project

The founding of the project will be done by Doxa-Credit through members’ donations.

 

Expansion of loan portfolio to meet diverse development needs of the poor

In order to get a more substantial impact on the economical and financial conditions of the community, this project will need to be expanded. As the general credit program gathers momentum and the borrowers become familiar with credit discipline, other loans programs will be introduced to meet growing social and economic needs of the region. Besides housing, such programs may include:

• Credit for building sanitary latrines

• Credit for installation of tubewells that supply drinking water and irrigation for kitchen gardens

• Credit for seasonal cultivation to buy agricultural inputs

• Loans to lease equipment/machinery to help farmers

• Finance projects undertaken by the entire family of a seasoned borrower

 

The underlying premise of Doxa Credit is that, in order to emerge from poverty and remove themselves from the clutches of usurers and middlemen, landless peasants, the poors need access to credit, without which they can not launch their own enterprises, however small they may be.