Micro-financing a World of Change - CEF's Micro-financing Project with Free the Children

by Cale Simpson, CEF Social Media Coordinator  

Founded in 1995 by philanthropist Craig Kielburger, Free The Children is the largest youth empowerment-organization based on the principle of 'kids-helping-kids.'  The two main objectives the organization strives to achieve are: 1) to free children from poverty and exploitation and 2) to dispel the notion that kids are powerless to effect positive change within their communities. Currently their "Adopt a Village" projects, which rely on the involvement of the villagers themselves, are taking place in Kenya, India, China, Sierra Leone, Ecuador, Haiti and Nicaragua. By applying a 'Four Pillars' of support system in which education, clean water and sanitation, health care, and alternative income are the focus, Free The Children are able to generate and sustain successful communities.

Compassionate Eye Foundation (CEF) has teamed up with Free The Children to support the alternative income facet of the Four Pillar system.  A comprehensive education program for women is being set up whereby women support each other's income generating projects through a 'merry-go-round' financing system that tries to provide training in financial literacy, micro-enterprise development, animal husbandry, traditional skilled crafts, and sustainable agricultural techniques.

The second component of this system builds upon the 'merry-go-round' model by helping women transition into more advanced alternative income projects called Village Savings and Loan Activities.  This component is meant to be implemented with women’s groups who have already received their financial literacy, business skills and micro-enterprise training and have successfully completed an income generating activity. The basic principle behind the Village Savings and Loan system is to allow a select group of villagers to develop a savings and loan system through the purchase of shares. The accumulated savings are then invested into a loan fund that members can borrow from for income generating projects with the understanding that they must repay the loan with an incurred service charge.

The primary purpose of a Village Savings and Loan Activity is to provide simple savings and loan facilities, in a community that does not have access to formal financial services. Loans can also provide a form of 'communal insurance' to member that is supported by a social fund, which provides a small but important grant funding system to members in distress. CEF is proud to be a part of this sustainable, community-based micro-financing system because we see it as being integral to effecting positive change within developing third world communities.  We wish Free The Children much positive energy and success during the course of this project!