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New Nonprofit, Lending Promise, to Lend Poor Women Dignity as Well as Money

New Nonprofit, Lending Promise, to Lend Poor Women Dignity as Well as Money

Published 08-08-06

Submitted by Lending Promise

San Jose, Calif. - Some of the world's poorest mothers will soon be able to form businesses and gain skills to improve the lives of their families and communities, thanks to a new non-profit organization called Lending Promise. Founded by Meg North Taylor, of San Jose, the new organization offers microcredit to women whose household income is often less than one dollar per day. At the same time, Lending Promise enables fortunate people to further the women's financial independence by sponsoring a village or a woman.

Microcredit comprises tiny loans - often less than $25 per person - to people too poor to qualify for traditional financing. A loan goes to a group of co-signers, typically women. Although each one forms her own business such as a snack shop, farm, tour guide or handicrafts business, the women repay the loans as a group. Later, the groups often pool savings, making loans themselves to members who expand their businesses, Taylor explained.

According to Grameen Bank, the Bangladesh-based forebear of microcredit, although banks view poor people as bad credit risks, microloan borrowers have achieved an average repayment rate of 98 percent. That's significantly higher than the 85 percent rate guaranteed by the U.S. Small Business Administration.

Women are particularly perceived as risks. Yet soon after Grameen first offered microloans in 1976, its founder, Muhammad Yunus, observed that women borrowers repaid loans earlier and in higher numbers than men. They also invested more of their newfound income in education, nutrition and other improvements for their families, sparking changes in their communities. As a result, microfinance organizations offer about 95 percent of their loans to women.

Lending Promise will give its first loans this fall to Nepali women. The world's fifth poorest nation, Nepal is ravaged by a Maoist conflict that has caused an estimated 12,000 deaths and a decline in tourism - a major revenue source. Taylor, who traveled there in March, met over 75 mothers whose homes are without electricity or running water. "I asked children what they want to be when they grow up," she said. "Because villagers spend their time on tasks like hauling water jugs, most kids don't think about the future. I want them to have dreams - and live them."

About Lending Promise
Lending Promise Inc. is a non-profit microcredit organization that helps the world's poorest mothers increase their income to improve their children's futures. Those personal changes impact broader communities, resulting in higher literacy rates, improved nutrition and sanitation, lower mortality rates and stronger economies. By offering loans instead of handouts, Lending Promise empowers women to be financially independent. For information, visit www.lendingpromise.org.

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