A loan from VisionFund starts a cycle of positive events, as shown in the diagram below. Click on one of the cycle stages to find out how a small loan can impact an individual, their family, and their whole community. Follow the cycle to see how an individual and a community are impacted by one loan:

While many of the working poor have the ideas and ability to create a small business, few can access the capital they need to begin. Because they are asset poor and in need of only small loans, banks will not lend to them. With little savings to access they are trapped in poverty. The only credit available to them is often from local money lenders who charge exorbitant interest rates.

To successfully apply for a VisionFund loan the poor entrepreneur must demonstrate trust worthiness, a good work ethic and a sound business idea.

Through VisionFund a community bank is formed from a group of chronically poor entrepreneurs who mutually guarantee each other's loans.

Before the client receives their first loan VisionFund gives them 4-6 months training in saving, handling credit and in basic business. Clients must prepare a sound business case prior receiving a loan.

A loan can be as little as NZ$200. With this money a client can buy some seed or stock, or to fertiliser to increase crop yields, or basic equipment to operate a small trading enterprise (e.g. a sewing machine for shoe repairs).

Profits made from the sale of crops or merchandise can then be used to buy more seed or stock, or to start a new business such as tailoring.

Clients continue to receive coaching in business as well as agricultural  or trading practices as part of the development programme.

With a loan, entrepreneurs can improve farming,  open a hairdressing salon, sell handmade clothing and handicrafts or run a small convenience stall, to name a few. These businesses create jobs and generate additional goods and services and the whole community benefits.

Families are now able to support themselves and provide food for themselves all year round. The burden of borrowing money from local money lenders at high rates of interest is broken.

Parents are able to give their children more nutritious food and the family health improves. Parents have enough money to send their children to school.

The poor are a good credit risk, repaying their loans 99 percent of the time in Mongolia. Once the client has repaid their loan they can take out a bigger loan to continue to expand their business. Repaid loans are recycled to help other poor entrepreneurs to grow their businesses. VisionFund builds a bridge between commercial loan capital and the credit-worthy poor so they can lift themselves out of poverty.

To be part of VisionFund contact Rupert Ross on 0800 800 776 or email Rupert.Ross@worldvision.org.nz

It's not easy to start up your own business. Here in New Zealand we have a great infrastructure, accessible capital and business development loans, years of business tradition and a wide knowledge base. All these Mongolian entrepreneurs want is a chance to work their way out of poverty, and you can enable them.