Microfinance

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HPUMC is working with people in the Philippines in microfinance and finding great hope.  The mission of the HPUMC Microfinance Mission is to raise families out of poverty through loans to start small businesses while also providing encouragement and training so the businesses will thrive.  Two missions have been established in the Philippines; one is located near Baguio and the other near Cabanatuan. 

This is the first year for HPUMC to develop resources, using a microfinance model.   Generally, the program consists of small loans offered to people with completed business plans.  The borrowers will repay the loan and have enough to sustain and grow their small business.  One of the most difficult challenges with any outreach project is the sustainability of resources.  With this program in place, sustainability will be in the hands of the small business owners. 

People with little or no cash reserves have few financial options if they desire to change their situation.  Microfinance provides financial resources for clients not served by traditional institutions.  Relying on traditional skills or cultural needs, participants are able to pull themselves out of the circle of poverty into a new quality of living.  Loans may be offered to start new businesses or expand existing small businesses.  Unlike other traditional loans, these loans are not secured by collateral, but by a peer support system.  Clients gather at meetings to learn about finances, make loan payments, discuss business ideas and problems and support each other.  Their mutual support strengthens their commitment and raises probability of repayment and success.

Microfinance does not cure poverty but it is a small step to improve and sustain living conditions for people.  These small business ventures can develop into thriving centers for a community.  Not only are the financial resources of a family or community affected but, educational opportunities and health benefits are also improved dramatically.

Typically between 95% and 98% of these loans are repaid.  The small profit made from a loan is then reinvested in new business plans and the program itself is self-sustaining within a short time.  Success is difficult to quantify.  How is pride and self-confidence measured?  What is the value of education?  Microfinance reaches far and wide to increase the potential in people.