3 Degrees of Lending: 1st Degree

A while ago, I wrote about how begging is just being asked to give. Next, I’d like to write about various forms of borrowing or lending money, thus this post’s title, Three Degrees of Lending. Today's post is on the first degree, what I call “pass the baton” lending.

To explain what I mean by “pass the baton”, I’d like to present two concrete examples of using this form of lending. The first example is something I have done since finishing my university studies over 25 years ago. I pay a small monthly allowance (automatic bank transfer) to a student throughout his or her university career. Nearly always, these students are foreign scholarship students whose scholarships pay for basic university fees, but do not cover the high costs of living in Germany. (The monthly allowance is humble, but it does perhaps pay for bus fees or a month of coffee) When they finish their studies and are properly employed, they are to pay this “pass the baton” loan to another student. Thus, over the years, more and more students receive this modest relief and recognition for the work they do.

The second example, of “pass the baton” lending is a system I am currently in the process of setting up. This system will be private micro-financing groups consisting of a modest amount of businesspersons (e.g. 4-6), each contributing a modest sum of money (e.g. 100 USD). Each group will lend their capital as credit to a women’s co-op micro-financed business endeavour. I am working with other global community volunteers in four countries (Uganda, Rwanda, Kenya, Cameroon). These volunteers, both on the ground and online, are setting up Village Phone Salons, whose goal is offering mobile phone services to rural communities.

Some of the Village Phone Salon groups (e.g. women co-ops) are seeking credit to start up their Village Phone Salons, in areas where no micro-financing agencies are available. Thus we are setting up the above-mentioned private micro-financing groups. The estimated credit needed to set up one Village Phone Salon is 500 USD. We plan to work out an agreement with the first ound of women co-op receiving loans; one which stipulates that they will not only pay back their credit over a defined period of time, but they will also agree to offer practical assistance and guidance to the second Village Phone Salon in the future.

It is our hope that this type of lending plan will find success in these local communities. What do you think, does it sound interesting?