“Microfinance is now center stage of the development agenda. The 2006 Nobel Peace Prize was awarded to a Bangladeshi microfinance bank and its founder - the Peace prize, not the Economics prize. This testifies to the broad impact that microfinance has on communities and livelihoods, helping the poor while preserving their dignity.
Microfinance works. It is aligned with personal interests and responsibilities, while the group method brings accountability, and the savings component encourages planning. It is also an extremely cost-effective means of contributing to the Millennium Development Goals. The Church has a distinct advantage in delivering microfinance services, through its local presence, credibility and network. I am pleased that Five Talents joins those who are taking forward this vital work in the worldwide Communion."
Dr. Rowan Williams, Archbishop of Canterbury, International Patron of Five Talents
Microfinance refers to a variety of financial services offered to individuals and groups, typically those classified as the working poor. Microfinance products — loans, savings, and other — tend to be for very small amounts of money in relation to the income of the individual receiving the product. For example, in 2009, the smallest Five Talents initial loan size was $6. This was in Bolivia. Five Talents uses the term microfinance in reference to its efforts and programs to create sustainable businesses through microenterprise development.
Microenterprise development is the way in which Five Talents offers programs and services to the working poor in development countries, in an effort to help them launch and sustain small businesses that transform the livelihood of their communities. Microenterprises might include businesses in food production and sales, shoe making, carpentry, or tailoring, all essential to the communities we serve. Microenterprise development is reliant upon microloans.
Microloans, also known as microcredit, are part of the field of microfinance services offered to small amounts of money granted to individuals or groups in an effort to the working poor. Microloans often are made to groups, rather than individuals, to bolster accountability in repaying the loan. Five Talents microloans average a repayment of 95%.
For more information about microfinance, visit the Microfinance Information eXchange.