Microcredit program helps small businesses in Northern Illinois

Judy Zabielski (left) and Laura Mueller, co-owners of Acacia Organics, in Barrington, Illinois, USA, benefitted from a microloan provided by the Barrington Breakfast Rotary Club.

Judy Zabielski (left) and Laura Mueller, co-owners of Acacia Organics, in Barrington, Illinois, USA, benefitted from a microloan provided by the Barrington Breakfast Rotary Club.

By Narayan Murarka, chair of the microcredit committee for the Barrington Breakfast Rotary Club, Barrington, Illinois, USA

For several years, microcredit projects have been helping eliminate poverty by providing small loans to poor women in developing countries. But the need isn’t always overseas. Sometimes, it’s a lot closer to home.

My club launched a program in 2010 that focuses on small businesses in our area which are facing a short-term credit challenge. We have provided financing to several businesses in the last three years, some of which have matured and been paid back in full with interest.

Here is testimony from one small business, which needed help last fall to restock their store shelves with specialty gift items like lotions, soaps, and candles for the Christmas season.

“We sold pretty much everything we brought in,” said Judy Zabielski, co-owner of Acacia Organics, which specializes in health, wellness, nutrition, and beauty. “(The financing) was timely to fill our store with healthy gifts. The personal care they showed us was so touching and we are very appreciative that they are helping to spread the word about our valuable services.”

We started our program with businesses in the local Barrington area but have now extended it to the area served by Rotary District 6440 (Illinois, USA). A limited number of loans (maximum amount of US$5,000) are granted at modest interest rate (prime plus two points) with full expectation of payback.  It is exclusively for entrepreneurial activity – not personal consumption (such as food, rent, medical expenses etc.).

The working capital for the program was raised through the generous support from our local community foundation, banks, businesses and individual Rotarians.

Our motivation is to provide opportunity – not charity – for people who wish to start or expand an income generating business venture by offering seed money in the form of a loan. This project is about helping those who are trying to help themselves. It addresses and responds to the entrepreneurial spirit of individuals who need a helping hand.

A key difference between our loans and a normal bank loan is that once the credit is granted, our club assigns a club member to serve as a mentor. The mentor will frequently talk with the loan recipient, assess progress, and offer advice or support as appropriate.

We’ve posted a YouTube video describing the  program and welcome questions from clubs wishing to replicate our program or start a similar one of their own. Email us at info@barringtonbreakfastrotary.org. Also tell us what you think of our program by email or below. Through Rotary, we can help others, strengthen local economies, and make our communities stronger.

Source: Rotary Voices

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