Education is the kindling of a flame, not the filling of a vessel.Socrates

Donated loans now the default option on Good Return

October 3, 2013

When making a loan on Good Return, you might have seen the checkbox in your basket, asking if you’d like to make it a donation. We’ve now upgraded our system so that box will be checked automatically. It seems a small change, but it’s one that’s pretty important for us!

First, what exactly is a donated loan?

A donated loan is our preferred alternative to regular loans on the Good Return website. When you make a donated loan, 100% of the loan goes to the woman you choose. When she repays it, Good Return uses her repayments to fund our training programs, and so benefit even more women. Even better is that the government agency AusAID provides grants based on these donations to further support our work.

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The benefits of donated loans over regular loans

When making a regular loan, 100% of your loan goes to the woman you choose, but we ask you to pay a small administration fee. The money is not reinvested into education, since her repayments come directly to you. Because it’s not a donation, you don’t receive a tax deductible receipt.

Why are more donated loans a good thing?

The simple answer is that more donated loans = more education and skills training for more women.

More donated loans means Good Return can successfully deliver all of its programs, and continue to grow these programs to reach even more women. Education is a powerful tool for these women to lift themselves out of poverty. While receiving a loan is a good first step, any training a woman receives helps her use that money more efficiently and create even more benefits for her family.

These benefits could be anything like…

  • How to read, write, and do basic arithmetic.
  • Identify a need and start a new business within her community (for example, Taciana in Timor-Leste saw no one was selling poultry in her village, so she started raising chickens).
  • Marketing a business to serve new customers (in the Philippines women are selling solar lamps and fuel efficient stoves, but first had to spread the word why these were superior to dangerous kerosene lamps and smokey fires).
  • Learning how to price products, and calculate which lines in the shop make the most profit.
  • Stock management and budgeting, and knowing the real cost when the family takes stock off the shelves for their own consumption.

These are small things, and they add up!

What’s currently happening

In the three years of Good Return’s operation, two-thirds of all funds processed through the website are for regular loans. As such, they cannot be used for developing our programs or be matched by AusAID to boost our funding. Of course, they can be ‘recycled’ into many subsequent loans.

Increasing the portion of our income from donated loans means we can expand our programs and receive more funding from AusAID, to reach even more people in need of microfinance and education.

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Education has a broader reach

To compare…

  • Over 5,500 loans have been funded in the last three years
  • Over 19,000 individuals have participated in education & skills training

When a woman earns more income, she immediately reinvests it into her family. And when you add in the multiplier effect (household sizes are on average 5 people in the countries where we work, this equates to:

  • 27,500 people benefitted from microfinance loans
  • 95,000 people benefitted from education & skills training!

A disclaimer: some participants attend more than one course, so there can be some double-counting.

Can you give a donated loan?

If you’re in a position to lend $100, think about making it a donated loan. $100 can fund a loan and pay for a full training course for a woman. This gives her skills that will last a lifetime – skills that she’ll pass on to her neighbours, children, and relatives.

Donated loans are tax deductible, so there’s a perk for you too! Make a donated loan now.

Check out this infographic to see how a $100 donated loan helps 15 people.

Any questions? Just ask! Post below, ask on Facebook, or [email protected]

Categories: News, Responsible Microfinance, Skills Development

2 Responses to “Donated loans now the default option on Good Return”

  1. MUNI DEO SHARMA says:

    I want to open up a tailoring shop in Suva. I need some money for the operation

  2. Joni Joni says:

    Hello Muni, can we suggest that you get in touch with the South Pacific Business Development (www.spbdmicrofinance.org) as they will be able to help you further!

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