Trust Banks Help Women’S Businesses

The Women’s Opportunity Fund was founded in 1992, offering its first small-business loans to 23 women in El Salvador.

Today its budget has grown to more than $1.2 million, and it serves more than 97,000 clients in 19 countries.

WOF belongs to the Opportunity International Network, a Christian micro-credit organization.

Trust banks affiliated with WOF primarily target women because they make up a disproportionate number of the world’s poor. The banks have found that women are also more likely than men to pay back loans.

Women in WOF trust banks have averaged a 98 percent loan repayment rate.

Requirements for becoming a trust bank member and qualifying for a loan vary. In the case of Shalom 2000, one needed only to be a resident of the neighborhood where the bank meetings are held and to have owned a business for at least six months.

No business is too small. Trust bank clients include chicken farmers selling the eggs of a half-dozen hens, seamstresses operating a one-treadle machine, and small shop owners with a store of candy and knickknacks in their two-room houses.

The banks are ideal for many women because the loans help them continue to work at home while caring for their children.

Clients undergo stringent training.

Prospective trust bank members meet once a week for eight to 10 weeks of formation before loans are dispersed. In these meetings they learn how the bank works, get to know one another, build trust and develop leadership. This can be an important time of growth, as many of the women have never spoken in public nor run a meeting.

The group forms a constitution and sets policies and procedures for their bank’s operation. The trust banks range between 15 and 40 members.

By the end of the training period, when the loans are given out, members commit to mutual loan guarantees, promising if one member can’t make a payment, the group will make it for her. Remaining members ultimately cover defaulted loans.

Weekly meetings continue after members receive their loans. That’s where borrowers make their payments, monitor savings and loans, receive further training, resolve issues and plan future activities.

Loans are small and short term, beginning at $25 to $80 over 16 weeks. Second loans may be larger after clients have proven themselves.