Our Lady of the Lake Parish is embarking on a pilot project inspired by the Grameen Bank. Grameen Bank, primarily based in the third world, makes small “micro-loans” to people to help them successfully establish their own small business and thereby help to lift themselves out of poverty. Each person who receives a micro-loan must be part of a cohort of five other people who meet weekly with other similar cohorts to repay 1/52nd of the original loan. If the loan repayments are made weekly, at the end of the year the recipient can apply for another loan. The loan repayment rate for Grameen Bank is significantly better than for most other banks.
The goal of the pilot project is to determine if and how the Grameen model may be adopted and adapted to our local context. After much conversation, a steering committee identified a “niche” market of under-served potential clients. That niche would be people who are interested in establishing a small business (e.g., grass cutting, transportation, housecleaning, etc.) but who are not yet creditworthy. The idea would be to identify potential recipients, provide them with a small loan, and then have them work with a cohort of parishioners who could mentor and support them in the establishment and first-year of their business. The parishioners would bring expertise and experience that the potential client likely would not yet have. The hope would be that at the end of the first year the business would be successful enough and have enough of a track record that the business owner would be able to get a more substantial loan from another lending source. In other words, the goal is to help the potential business owner who initially is not creditworthy to become so.