Today we contributed $25 to a group of 15 women in Senegal, all of whom live together in a village and have their own trade businesses.
Group loans work a little differently than individual loans. They ask for a large sum of money that is divided between them according to their business needs. The chair person of the group requests the loan, but each person is responsible for paying back their portion. Every now and then, the group gets together and discusses how their business situation is going. If one person is struggling to pay their loan back, the other members step up and cover it for them so they will be able to keep a high repayment rate and request more loans in the future.
The “Aba Ndiaya” solidarity group formed over two years ago. They asked for $2,950, collectively. A portion of the loan will go to help the chairwoman, Mrs. Fatou (first name not given), to buy palm oil and lemon juice. Mrs. Fatou, 53, has sold these products for several years, but wants to increase her inventory to improve the standard of living for herself, her husband, her five children, and four other children she cares for.
Senegal is located on the northwest coast of Africa, along the same latitude as Nicaragua. The average annual income per capita is USD$1,759. The microfinance institution administrating the loan is charging 17.5% interest. Remember, the interest stays with the institution, and is not transferred back to the loaner.
So far, the loan is 52% funded. The group still needs $1,400 in order to reach their requested amount of $2,950. By the end of the day the loan should be raised to the full amount. I will keep you posted….
Today we contributed $25 to Zareena, a woman in Pakistan who runs a livestock business. Her main responsibility is to buy baby goats from animal markets, raise them, then sell them for profit. She is asking for a loan of $925 to buy a buffalo, in hopes that she will be able to sell milk in her community.
Zareena has one school-age daughter, and three young children who are not old enough to attend school. We hope that this loan will enable her to earn enough money to provide for her children and have them all educated.
The average annual income per capita in Pakistan is USD$3,004. The Field Partner assisting Zareena with her loan is charging her 34.08% interest (keep in mind that interest goes to the institution, not the loaner). This seems high, but this rate is low compared to what some microcredit institutions charge. I think it defeats the purpose of helping these businesses to become profitable if they have to pay ridiculously high interest on their loan. Therefore, I only support Field Partners who charge their borrowers less than 35% interest.
So far, 8% of Zareena’s requested loan amount has been raised. Hopefully, the remainder of the funds she needs will be contributed by the end of the week. I will update you when this happens, and we will soon make our second loan!
As of this writing, the “stock market” is down nearly 10% for the year. That’s quite a bit. We are close to entering a bear market (down 20% or more). There is quite a bit of panicking. And there is a lot of people wondering why we would even invest at all after something like this.
There are a few reasons, but the most important thing to think about is your Investment Policy Statement. Every investor should have one. This is a document that actually explains WHY you are an investor. If you don’t have one. Get one. Your financial advisor should help you write it. If he doesn’t, you should fire them and get a new financial advisor.
Because if you don’t know “why” you should be investing, then you shouldn’t be investing at all.
Fortunately I’ve never been a victim of credit card fraud or identity theft so I always figured that using a credit monitoring service would be an unnecessary expense for me. I never even take advantage of the free annual credit report offered by Experian, Equifax and TransUnion. However, I was recently presented with my credit score when doing some refinancing and much to my surprise, there was a blemish on my report for a charge that I have since disputed.
Keeping a clean credit report is imperative these days. Credit monitoring services typically cost around $10-$15 a month and provide customers with unlimited access to their credit report and score as well as notification should any significant changes occur. Some folks will argue that credit monitoring does not prevent fraud, it only makes you aware of it after the fact. I tend to believe that knowledge is power, and if one doesn’t know they’ve been a victim of a fraud or an error, then they won’t have the power to do anything about it. Another argument against these services is that self-monitoring is free. Personally, I know that my life gets too busy sometimes so I don’t trust myself to consistently self-monitor my credit. The blemish on my report had been there for a year before it came to my attention so I worry the disputed charge will be harder to prove (my dispute is still pending).
Among other things, the information in your credit report affects whether you can get a loan or insurance – and how much you will have to pay for it. Potential employers may check your credit report as well. A credit monitoring service is not for everyone, but if you want to keep a close eye on your credit and don’t have the time to do it yourself, there are some great service providers out there. If you think you can stay on top of this task yourself, check out the Federal Trade Commission’s useful and empowering website that can help you do the job: http://www.ftc.gov/bcp/menus/consumer/credit.shtm .