Micro-credit

SPEED Trust’s micro-credit program is meant to improve its beneficiaries’ situation by promoting among them a sense of responsibility and by encouraging them to create, manage and improve their own businesses rather than depend on anybody else’s goodwill. On the long term, the micro-credit program is oriented towards community development through job creation, improvement of the average living standard and promotion of solidarity among the slum-dwellers.

The basic principle of micro-credit is to grant small loans to people who are too poor to access the services of the traditional banking system. Because they have no guarantee to offer, the beneficiaries of the program are selected through a strict process making sure that only the deserving, motivated ones get a loan. The loans we grant, ranging from Rs.1000 to Rs.10,000, are exclusively dedicated to the slum-dwellers who have a viable income-generating project.

The service charge of 2% per month, more than ten times lower than the interest rates practised by most moneylenders, is meant to cover the expenses of the program.

Two concrete cases:

Mahalakshmi, who had been running a grocery shop in the slum for several years, lost her whole stock during the events of December 2004. SPEED Trust granted her a 10,000 Rs. loan to replace it, thanks to which she has restarted her business. Since then, she has been repaying regularly, and is even able to save money out of her monthly earnings.

Thanikavel, a tailor, has been granted a 5000 Rs. loan two months ago. He needed to buy enough raw materials to face the demand, which booms at the beginning of each school year because of the need for uniforms. The loan thus enabled him to significantly increase his incomes.