Developing country start-ups loan scheme passes £1m mark

A MICRO-LOAN scheme, which allows the general public to lend directly to people setting up small businesses in developing countries, has broken through the £1m barrier.

Lendwithcare, which was launched last year by The Co-operative and international aid and development organisation CARE International UK, has seen more than 26,000 loans made to small-scale entrepreneurs in developing countries, amounting to more than £1m. These entrepreneurs range from hairdressers and market stall holders in Togo, West Africa, to artists and farmers in Cambodia.

On average, each lender supports six entrepreneurs, with a minimum loan of £15.

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Among those who have been offering loans is Heatha Kitchin, from Nidderdale, in North Yorkshire.

The one millionth pound was loaned to 37-year-old father of three Jay Roy Mendez in the Philippines for his convenience store business by Mrs Kitchin, who has now lent to 23 different entrepreneurs through the Lendwithcare website.

She lent him £75, and he was loaned £176.58 in total from the scheme’s pot of lenders.

Mrs Kitchin said: ”I love this initiative as my money is not just used once, but time and time again to help different people. When my mother died I decided invest in entrepreneurs in her memory.

“As a former teacher I like to look at who the entrepreneurs are supporting and lend to those putting their children through school.”

The loan is repaid to the lender over an agreed repayment schedule – usually a period of six to 12 months – and when the repaid loan is credited to the lender’s account, they can choose to withdraw the money, donate it to CARE, or recycle it into another loan.

Hannah Newcomb, international development manager at The Co-operative in Manchester, said: “ has certainly captured the imagination of thousands of people in the UK and we are delighted to have made such progress in a relatively short period of time.”

Head of Lendwithcare, Tracey Horner, said: “More and more people are discovering that making a small, affordable loan can make a massive difference to people seeking to work their own way out of poverty. The fact that lenders can then recycle that same money to another entrepreneur makes this recession-proof giving. The entrepreneurs on work tirelessly to pay back their loans and establish a business to support their family, but many more entrepreneurs are waiting for support.”