VHU Rural Fund (Village Micro-Finance Project)
Supporting economic self-entrepreneurships. The idea of micro-finance is simple yet empowering. Micro-finance is the extension of small loans to entrepreneurs who are too poor to qualify for traditional bank loans. The loans are typically short-term (a year or less), are not secured by collateral, and require repayment in weekly installments. The starting loan extension being Uganda shillings 50,000/= (USD $ 20), Giving individuals the opportunity to start micro-enterprises (small businesses) has proven an effective and popular measure in the ongoing struggle against poverty. Micro-finance empowers individuals to use their existing skills to create viable businesses, which allows them to improve their living standards, and ultimately benefits the entire community.
Formation of the groups:
The idea behind this project is that rural women under VHU programs will borrow a certain amount of money to start businesses or boost their families’ income. Once the business is started, members will be expected to pay back the amount they initially borrowed. The money borrowed will then be reinvested in another member of Beacon of Hope Uganda wishing to start a new business. The members will have approximately four months to one year to repay the money, depending on the needs of their businesses, the amount taken and the agreement made with VHU. You can adopt this project by donating a seed loan of $20-$300 to kickstart a woman’s business and grant her economical independence.
Women are placed in groups of five and guarantee each other for the loans. VHU also provides the women with education about financial management, business planning and management training are offered to help them in all aspects of money, budgeting and so forth. There are currently about 15 (the program has over 67 people) people participating in the program (mostly women). When women succeed in their small business, it positively affects many lives around them apart from their own. There is a flow on effect to the whole community.
These include donating animals to women so they can start agriculture businesses, and providing training in tailoring and craft, with products sold locally and internationally via our sponsors and volunteers. VHU has also purchased some land with a long-term view to develop larger scale community farming.
The focus in VHU microfinance program lies on the development of positive social impact (and identifying ways of measuring this). Nevertheless, when considering the broad spectrum of potential micro-entrepreneurs, specific social and environmental risks are not overlooked. Examples of such risks are the use of child labor, groundwater pollution by use of agrochemicals, and soil pollution by an automotive repair workshop.
•Volunteer with our micro-finance project in Uganda. •Donate seed money for village micro-finance projects. •Contact our office to learn more about how you can support micro-finance projects in rural village communities.