1.4 billion people, one quarter of the developing world, live in extreme poverty. With less than a dollar a day a person cannot afford basic human necessities like food, clean water, shelter, health care and education - basic necessities that HOPE believes everyone has the right to.  Under these extreme conditions of existence the lives of the poor become a daily struggle for their survival and the survival of their families; they are locked in a cycle of poverty which is difficult to break.
 

Microfinance is one way to break this cycle. By providing motivated people living in extreme poverty small, low-interest loans HOPE is helping make a positive change in their lives, giving them the opportunity to become self-sufficient and self-employed. Through their participation in microfinance groups (trained and monitored by HOPE staff members) these individuals learn how to manage their projects, how to manage their loan and how to make their project a success. With the money earned from these income-generating activities, they will become able to afford the basic necessities that their families need, pay back their loan and to finally break the cycle of poverty.

Microfinance is designed for those who cannot access a traditional bank loan and who many times have to resort to money lenders when there is a desperate need for cash. Many money lenders exploit the poor charging inflated interest rates of 10%, 15%, or even at times, 20% or more per month. These elevated interest rates force the borrowers to pay more than three times the initial borrowed amount, forcing many families to live year after year paying these elevated interest rates. This makes little sense, yet the poor continue to rely on money-lenders because the banks are not willing to offer small loans to serve people who have little or no savings.

There is safety in numbers. HOPE encourages small community groups, mostly constituted of women, to come together seven months before receiving their loans to discuss their different projects, how to manage their loans and to elect a treasurer. After this period each member proposes their individual project and the group votes on each project and afterwards the group makes a proposal for a start-up capital from HOPE International Development Agency.  A first loan is of maximum US$50 per member and after it is repaid to the group fund, members of the group can apply for a new, larger loan. Once the initial start-up capital is provided by HOPE the group fund becomes the responsibility of its members, empowering them to make joint decisions about how to manage it.
 

These groups benefit from a consistently high repayment rate that exceeds 90%. Because the group owns the fund they have a vested interest in the success of the borrower, it not only benefits the group from the loan repayment, but also benefits, often, their friends, neighbors and their community. These savings and loan group members, with help from HOPE, are also provided with literacy and business management training.
 

 

After being repaid at a manageable interest rate, the borrowed money will then be made available for further loans to the group members. Following a successful repayment history, larger long term loans at low interest rates will be made available to individuals within the group.
 

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