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

Co-operative Economics Self Help Groups How to Get Capital for Business? Also known as: Credit Cooperatives Paluwagan (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 ability Rs 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