What is the Small Business Fund?

We approved grants for another 20 new small businesses at our Board of Directors Meeting over the weekend! So this is a perfect time to repost these frequently asked questions (and answers) about how our Small Business Fund works. Feel free to post more questions in the comments section below.

How much a difference can $150 really make? While visiting Kenya and Malawi, Boyd and I saw many thriving businesses established through the Spirit in Action Small Business Fund. Read on to learn more about this life-changing program.

1. What is the SIA Small Business Fund (SBF) and how does it work?

Woman selling doughnuts at the market in Malawi.

The Small Business Fund (SBF) is SIA’s program to support economic development in developing countries. SIA has supported 445* small businesses in Kenya, Malawi, DR Congo, Rwanda, Nigeria, Uganda, India, and Philippines since the program started in 2003.

*As of last month SIA has supported 513 businesses since 2003!

Groups of 3-5 people receive business training and a $100 initial grant to start or expand their business. After three months, if the group is successful, they receive an additional reinvestment grant of $50.

The SIA office receives a copy of the business plan, a 3-month Business Report and a One Year report, so that we can follow the group’s successes and challenges.

2. So it’s a grant, not a micro-loan?

Our grants are the first step out of poverty and can eventually lead to micro-loans once the businesses are established. Micro-finance institutions, even ones that claim to help the poor, often require high collaterals and have crippling interest rates – we were heard countless stories about families losing their belongings and being charged as much as 48% interest on a two week loan. SIA works with people and in areas that are often ignored or exploited by micro-finance institutions.

It is a rarely acknowledged fact that no company in the United States begins without start-up capital from outside investors. These investors are known as “angel investors” because they believe in the business model and they are willing provide the entrepreneurs with the capital needed to get their idea off the ground.  SIA follows the same principle; SIA donors are effectively Angel Investors for people in developing countries.

3. Who are the SBF Coordinators?

We currently work with five SBF Coordinators who serve in their local communities. They are dedicated volunteers with experience in community development, who work with our SBF Guidelines and send us reports and stories of the businesses. Before people become SBF Coordinators, we get to know them over the course of many months to establish a relationship of mutual trust. Through this process, we also come to better understand the specific needs and challenges in their community.

4. How do you decide who receives the grants?

Our SBF Coordinators develop location-specific criteria to identify the poorest households in their community. They visit families to ask how many meals they eat and if children can attend school, and to detect the opportunities and skills that the family could use to start a new business.

5. What do you provide in addition to the grant?

Benoit Malenge goes over record-keeping with a new business leader in DRC.

Before anyone receives a SBF grant, they receive business training from our Coordinators. They learn about record keeping, accounting, decision-making, marketing, and budgeting.

After receiving the grant, the Coordinators continue to check-in with the group, offering tips to help them improve their business and giving words of encouragement. Many people we met in Kenya and Malawi appreciated this individual support and saw this as a crucial part of their success.

6. Is $150 really enough to start a business?

Yes! Without capital, capable business people cannot get the start-up supplies needed to open a business. The initial $100 grant can enable them to buy materials for repairing bikes or items for their new store.

To ensure that the businesses continue to thrive, our SBF program also requires reinvestment. Members often reinvest 25-50% of their profits to expanding their business.

7. What kinds of businesses do people start?

People start businesses to fill the needs and wants in their community.

Some typical businesses are:

  • Farms (maize, vegetables, tomatoes, cassava, etc.)
  • Bakeries and restaurants
  • Bike repair
  • Brick making
  • Basketry and other handicrafts
  • Buying items in bulk and reselling in the market
  • Small grocery stores

8. What do people do with their business profits?

Woman in Malawi with iron sheets ready to go on her new house.

Woman in Malawi with iron sheets ready to go on her new house.

SBF members use their profits to expand their businesses and improve their lives. After receiving the small SBF grant, their businesses can generate enough profit to:

  • Send a child to school
  • Buy roofing for their house
  • Buy new clothes and shoes for their families
  • Provide better food
  • Buy a bicycle, so that they don’t have to walk everywhere
  • Buy more items to sell in their stores

9. Shouldn’t people have to pay back the grant with their profits?

Rather than ask people to pay back the funds to SIA, we ask them to pay it forward, through our Sharing The Gift initiative.

Once a business has been successful they give back to help someone else. For example:

  • Winkly in Malawi received the gift of a piglet from a successful SBF piggery
  • 5 groups in Nigeria saved $150 from their business profits so that someone else could start a business.
  • Mary in Kenya trained another woman to make wedding cakes, so that she could open a new business.

10. How do your Christian principles enter into the SBF program?

Most of the people we work with come from a Christian faith tradition and people from many different churches and denominations come together through the SBF program. Our training guidelines teach about listening prayer and starting prayer groups to help group members share their problems and pray together for solutions. However, SIA is not evangelical and does not require anyone to be a member of a church or to declare his or her faith to participate.

Your donation of any amount helps people start small businesses and live up to their potential! After you busted the doors on Thursday or Friday and shopped at your favorite local shops on Saturday, today I invite you to start the giving season with SIA at the top of your list! You can donate online here.

Expressing Gratitude for Real Improvements

A happy Thanksgiving to you all!

This week, in the spirit of gratitude, we’re sharing a video of a woman who is very grateful for Spirit in Action.

Boyd and I met Justina in Manyamula Village, Malawi last summer where she shared this testimonial of how her life changed after receiving a Spirit in Action Small Business Fund $150 grant.

For more SIA videos click here.

Moving, and Meeting Angels

This is an excerpt from a talk that I gave at Bonny Doon Presbyterian Church, sharing my personal journey and about my work with Spirit in Action. ˜ Tanya

If you’ve ever moved to a new place, you know that it can be really hard. New places can be uncomfortable; they force you to encounter new things and new cultures, even within different regions in the US. You have to find a new grocery store, a new bank, new friends.

SIA faces of compassion

And yet these moments when we are lost and lonely are moments when we are perhaps most likely to be touched by one of God’s angels on earth. Rachel has been one of those angels for me. A kind colleague of Boyd’s invited us over for dinner one Friday night. She gave me something to look forward to, she cooked a wonderful meal, and she gave us tips for things to see in the city.

Simple; but her smile makes me feel like we’ve already been friends a long time. And to me, that’s the blessing of moving. That’s experiencing God’s grace and love. If we’re standing in the same place all the time, it’s harder to meet new angels.

In a way, these angels, even though they are not the ones moving to a new place, are being emotionally moved. There are many times in the New Testament where we hear that Jesus was moved with compassion for people.

Del Anderson founded SIA, at the age of 90, as a manifestation of his drive to do good works in the world. He had lived a life filled with challenges – being a bi-racial man growing up in the early 1900s – and also a life filled with blessings.

Del was moved to compassion for people around the world who were lacking basic needs, like food, shelter, and a livelihood. He was moved by his conviction that people had the skills and drive to help themselves, and all they needed was encouragement and tools to get started.

He began his ministry by providing information to people – information about growing more food, making soap, planting fast-growing trees that could be used for lumber, fences, or shade. And sometimes he provided a small grant to help people pursue their dreams and improve their lives. (For more from Del on Compassion, read from his journal here.)

Through this work with Spirit in Action, I am continually inspired by people who are moved with compassion for their community.

guardian's group with CIFORD Kenya.

Women in the guardian’s group with CIFORD Kenya.

For me compassion is embodied in an older woman we met in Kenya. She is a member of a self-help group within the local organization CIFORD Kenya. She is also a grandmother, taking care of five of her grandchildren whose parents died from HIV/AIDS. When I met her, I saw in her the loving kindness that comes from compassionate acts.

She was moved to care for the grandkids even in her older years. And she was at the self-help group (where we met her) because that’s a stressful job. How will I buy school uniforms so that my grandkids can attend school? Who will collect water so that we have clean water to drink?

The blessing is that this group of 20 to 25 guardians is there to support her. Their cooperative movement means that they are all there to support each other emotionally, and also economically, with a small loan fund within the group. And their movement, their action, means that the children are cared for by relatives rather than be sent to terrible, overcrowded orphanages.

As these examples show, being willing to be moved is to embody generosity and to allow yourself to be an angel to someone else.

5 Non-Elections Related Things Crossing My Desk Today

1. Maize Machines – Bought and Delivered!

This is progress! Last spring’s SIA Silent Auction helped raise the funds for the Manyamula Savings and Loans Cooperative to purchase a maize mill in Malawi. I heard from Canaan over the weekend and the mill has been purchased – and as a bit of a silver lining – the devalued local currency meant that the SIA grant was enough to purchase two mills, instead of one!

MAVISALO members with the 2 new diesel engines!

MAVISALO members with the 2 new diesel engines!

“I am glad to inform you that the 2 sets of maize mills with diesel engines are procured and they are with us in office. There is a Milling Mill and a 2 Roller Milling Sheller. This week by Friday a technician will come to fix the mills in a rented house belonging to Red Cross, which is located at the center of our community market.”

 

2. Congratulations to the Trophy Winners!

In other exciting news from Malawi, the winners from the MAVISALO Soccer Trophy (mentioned in the Fall 2012 newsletter) have been announced!

Orchard Youth Soccer Team won the soccer tournament and received the $30 1st prize. The VISALO Youth Soccer Team, sponsored by the Manyamula Savings and Loans Cooperative, came in 2nd place, winning $20. Congratulations!

3. The Teimuge’s Samro School

Peter Ayum in High School Form 1

Peter Ayum graduated from Samro School and is now a freshman in High School (Form 1)

Following on last week’s post with some words of wisdom from Samuel Teimuge, this week I received an annual update on his and Rhoda Teimuge’s K-8 Samro School in Eldoret.

“Samro School is fourteen years old and has sent 80 students to high school. The report reaching us is that almost all of them are disciplined, honest, hard working, and they reference God in their lives.”

If you want to see their latest project or contribute to their school, visit Advancing Leaders International.

4. Supporting Women’s Organizations

There’s a great new crowd-funding platform, Catapult, which helps connect donors with women/girl-focused grassroots organizations around the world. I wrote a review of the website here, and I encourage you to check it out and see all the wonderful local organizations out there helping women and girls in their communities!

5. Encouraging Quote!

And when all the election coverage gets to be too much, keep this advice from Rumi in mind:

“Move to the edge and over. Fly with the wings
he gives, and if you get tired, lie down,
but keep opening inside your soul.”

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