Three Secrets to Success
David’s 2nd Blog from Kenya/Uganda
Over the years, Heaven’s Family’s Micro-Loan Ministry has evolved. We’ve come a long way since the initial $100 loans that I made to ten poor Nigerians in 2004 to help them start small businesses. When I returned one year later to collect, only three borrowers showed up for the repayment meeting, and those three came to explain why they could not repay.
It was a consolation to me that, even though my first attempt at making micro-loans was a complete failure, I knew I had at least tried to help ten very poor people. I also knew one very important secret to success: Learn from your failures. When life brings you manure, use it for fertilizer. So I did not quit.
I won’t take your time to tell you all the twists and turns along the way, but our Micro-Loan Ministry, and our repayment rate, slowly improved year by year. Some years back, I applied a second secret to success: Recognize your own limitations, and partner with others who can do what you can’t.
So we first employed David Growden, a gentle, big-hearted saint who could devote more time than I could to our Micro-Loan Ministry. After him, Dick Samuels took the reigns. (Dick Samuels now directs our Farming God’s Way Ministry). And finally, Dan Steward, our current director, who took an early retirement a few years ago from his VP position at IBM to serve the “least of these” around the world.
Dan (along with his team of five other Heaven’s Family staff), have developed a secret sauce that has benefited thousands of borrowers in 14 nations. They’ve applied a third secret to success: Never stop learning or improving.
These days, borrowers are more likely to repay because they are (1) thoroughly vetted before they receive loans, (2) educated in business principles to help them succeed, (3) mentored by a micro-banker who has already repaid a loan, (4) often promised a second loan if they repay their first loan, (5) contributing personal savings as part of their loan payments and (6) held accountable in small groups of five borrowers who meet regularly to discuss the Bible and business. Group members must trust each other enough to guarantee each others’ loans (we refer to that trust as “social collateral”). There are no second loans to groups that don’t collectively repay their first loans.
Other ingredients of our secret sauce are: (1) thoroughly vetting and training micro-bankers (we have 77 right now), (2) starting small and growing slowly, and (3) stringent accountability (which requires regular communication, reporting and onsite visits with our micro-bankers and their borrowers).
All of this administration requires human and financial resources. Desired repayment rates are inversely proportional to the degree that administration is neglected. That is, you can save money by just handing out loans and have a 0% repayment rate (like I did in Nigeria), or you can adequately administrate and almost enjoy a 100% repayment rate, which not only means that you have more money to re-lend, but that you love your borrowers as yourself by setting them up for success rather than failure.
I’ve spent the last two days in Uganda with Micro-Loan team members Isaac Shepherd (Regional Director for Africa and Caribbean) and Jenna Liberati (Financial Associate) visiting some of our successful micro-bankers and their borrowers. We’ve visited their businesses, heard their testimonies, and looked at their handwritten P&L statements. They are growing mushrooms, creating cutting-edge educational materials, starting nursery schools, raising livestock, opening small retail shops, running little restaurants, designing and manufacturing sandals, selling charcoal, making and selling herbal jellies, and more.
They are repaying their loans.
They are prospering, being discipled and giving glory to God.
They are all very happy and thankful for Heaven’s Family.
Below are a few photos with captions from the last two days. Thanks for joining me on this trip!