Micro-Credit
Rotary Micro-Credit Program
"Empowerment - Not Dependency"
The Purpose: The objective of this program is to provide opportunity for individuals to start, sustain, or expand an income generating business venture by offering seed money in the form of a loan --- often called micro-loans or micro-credits. The micro-credit program’s purpose is to empower people to become economically self-reliant. Our motivation is to provide “empowerment – not dependency” to individuals who have difficulty getting credit through the normal banking system.
This program is not meant to be a grant but a loan with full expectations for pay back of the principal with modest interest. The loan itself is not meant for personal consumption such as food, rent, medical expenses, education, etc. It is necessary for the recipients of such loans to have other sources of income to sustain themselves for day-to-day living.
Benefits: Most non-profit and service organizations, including Rotary, address the needs of individuals in a holistic fashion, treating body, mind and spirit. Health and wellness begin with an individual's sense of well-being and security. Through this important program, we seek to deliver in some small measure on these basic human requirements. Few aspects of life are more essential than a livelihood that enables people to provide for themselves and their families.
This project is about “helping those who are trying to help themselves.” In other words, the program addresses and responds to the entrepreneurial spirit of individuals needing a helping hand. Our primary focus will be to attract only those people who are motivated, focused, and willing to put in hard work and are seeking opportunities to uplift their family’s life.
Micro-credit is also a means for self-empowerment. It enables the poor, especially women, to become economic agents of change. Engagement in an income generating business will serve as a role model for others in the community.
Operational Guidelines: A limited number of loans, with a maximum amount of $5,000, are granted with a modest interest rate
of prime plus two percent using simplified requirements compared to traditional banking institutions.
A Micro-Credit recipient must be an American Citizen or Green Card Holder and live or have business in a geographical area associated with Rotary District 6440 as shown. There are over 70 local Rotary Clubs in this area. Applicants should contact their local Rotary Club for sponsorship.
All Applicants will undergo a “credit” and “background” check as appropriate. The Applicant will also be required to acknowledge receipt of the “Privacy Policy.”
The primary factor affecting the approval of the loan will be the viability of the proposed venture and the Applicant’s ability to repay the loan. This will depend on gross revenue, either actual or projected, profit margin, cash flow and repayment schedule from the business venture. Other sources of income will also be considered to assess the Applicant’s ability to repay the loan.
Partnerships: The Rotary Micro-Credit Program offered by the Barrington Breakfast Rotary Club is for the benefit of individuals residing or doing business within the Rotary District 6440 jurisdiction. We will work with our sister clubs in the area to facilitate its implementation. Rotary Clubs are requested to contact us so that we can walk through the process and help them qualify potential Applicants. Participating Rotary clubs are not required to provide any funding nor will they have financial liabilities.
References: Applicants are required to provide references from a service club, a business and/or an individual. This individual should be a person of good standing within the community and is expected to know the individual Applicant and his/her family over a period of time and vouch for the honesty, integrity and character of the Applicant. He/she will not be involved in handling any money nor will he/she be co-signing the loan.
The Structure: The Barrington Breakfast Rotary Club will administer this program in its entirety. A Committee has been set up to review the application: There are three basic factors that need critical review:
• Does the Applicant show commitment, dedication, and perseverance?
• Does the business venture have a reasonable chance to succeed?
• Is there enough cash flow for the loan to be repaid?
The committee members will interview the Applicant, make a site visit, and review credit/background check results, etc. The committee will deliberate and make the final decision. Committee’s decision is Final.
Process: The following information will be requested from the Applicant.
- Personal Financial Statement – Provide personal data of the Applicant and spouse including name, address, phone, social security number, employment info, etc. together with financial information. (Form will be provided)
- Application Form
- Reference Form
- Business Plan – An outline of the business proposal, dollar amount requested, the way the loan will be used, some projection of income and expenses, and repayment schedule. Members of the Micro-Credit Committee will assist the Applicant to develop the business proposal.
Our goal is to make the process as simple as possible. We recognize that a prospective Client may be discouraged when confronted with too much paperwork. We will work hand in hand with the Applicant to ease such a concern.
Designated Mentor: Once the loan is granted, the client will be assigned Rotary members to serve as Mentors. The Mentors will frequently talk to the client, assess the Client’s progress, and offer advice or support as appropriate. The Mentors will also see that the Client is following the payment schedule.
Contact: Narayan Murarka Ph: 847-836-0494 npmurarka@comcast.net
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