When you have no money……how do you get capital for business?

Co-operative EconomicsSelf Help GroupsHow to Get Capital for Business?Also known as:

Credit CooperativesPaluwagan (Philippines)Cash-go-round (Uganda)Bayanihan Banking System (Manila)Mandal (India)

Why Self-Help Groups?

If people have work, the family will be happy

If people have work, they will support the church

If people have work, they can become leaders in the church (qualification of a leader – he must manage his household well).

What is a Self-Help Group? 8-25 adults (usually 10)

Usually women Better in a homogenised

people with close social ties Contributing weekly to a

common fund Once it has grown, giving

that fund to one member to start a business

Structure of a Self-Help Group They elect their leaders They give a name for a group They decide to save a certain amount

(usually Rs50 per month) A savings account is opened in the group

name and operated by the leaders jointly They gather once a week and discuss the

family problems, social issues, health issues

Problems with Self-Help Groups Q. There are many emergencies that disrupt

savings A. Establish two common funds, one saving for

business, the other for emergency needs

Beyond Self Help Groups…

Once a group has demonstrated Capacity to Save Ability to manage finances, budget, repay loans

They can seek a micro-finance program that will grant larger loans based on their demonstrated credit Keep all the records so you can show your credit-

worthiness

Taking Loans

After three months They will have Rs15,000 they can start to take a loan from their own

group fund They should repay this money with a small

interest to increase the fund

Record Keeping

Individual pass book Savings register Cash book Loan register General register Minutes book Attendance register

What Businesses can they start Candle-making Fruit jiuce, Fruit Jam,

Pickles Cleaning powder Flower Garenng Computer education Pepsi ice cream Mobible tea cart Watch repairing centre Sarees rolling Coffee making unit Wire Net baskts

Tiffen Dry Fruit Sales Fruit Plants Vending Wet – Dry Flour Grinding

Each according to their abilityRs 5000 or Rs 10,000

business capital

Impact of Self-Help Groups Break power of money-lender Women stand on their own legs by earning

through micro-enterprise Women participate in the decision-making in

all matters of the family. Before that they were dependent only on their husband.

Women participate in community development programmes and social issues

Increase in offerings to the church

Selection of Beneficiaries Regular member of the church Member of Self Hel group Poor situation Regular in savings and attendance Recommended by committee Feasible project which will generate regular

income and enough for repayments

The Duty of the Pastor Train the Members

(Eph 4:11,12) To share the gospel

In word In deed

Raise up leaders Deacons Elders

(Pastor can be a member of the committee not the supervisor, he should look after the spiritual not the financial – if the pastor is there, he will just forgive their debt and the project will not work)

Roles of Committee

Secretary Treasurer One elder or deacon 2 beneficiaries Program Coordinator

Economics of the Project

Beneficiary Income Ave income per day Rs100 x25 = Rs2500per mo Costs per day Rs30 = Rs750 per

mo Labour costs Rs 50 x 25 days = Rs1250 Total left in hand Rs500 Less repayment per month Rs300 Total surplus Rs200

Problems

Q. Should you charge interest? A . Collect a small service charge

Q.Is this different to tithing? A. Yes, they are already tithing

Q. Why are men not encouraged? A. Yes be involved but do not take a prominent

role over the women Q. If members do not pay in time, what can we do?

The group must take responsibility