FAQ

How do I sign up?

Simply choose the profile of an entrepreneur you wish to partner with.  As you contribute funds, you will be prompted to set up your portfolio and credit card information. Alternatively, you can click on "My Portfolio" and go to "Start a New Portfolio," where a series of prompts will help you to set one up.

How do I find a loan to fund?

Begin browsing the loan catalog by clicking on the "Make a Loan" button in navigation bar on the left. You can now browse the loans by sector (Agriculture, Production, Services, Retail) and the individual loans will appear on the right side of your screen. To see more loans from that sector, simply click on the button called "See more loans." To view expanded details about the client and the terms of their loan, simply click on the short description on the right hand side.

How long will CIDA be offering a match of my donations?

CIDA has generously offered to match funds donated through MEDA Trust towards the women of Afghanistan for a total of three years or $1.2 million, whichever goal is met first.

How do I add funds?

You can do this two ways: First, you can log into your portfolio and click "Add Funds" in the left navigation bar of the "My Portfolio" page. You then enter the amount and your credit card information.

The second method is to simply choose another entrepreneur who you wish to partner with. When you continue through the process, you will be asked if you wish to use the funds in your portfolio, add more funds to your credit card or a combination of both. If you wish to donate an additional amount through your credit card, click on that option and confirm the amount and your credit card information.

What is the "Active Period" of funds deposited?

If there is no activity in your portfolio over a two-year period, your account will be discontinued. Your donation will remain invested with MEDA partner MFIs – so your contribution will have an ongoing impact.

How do I view my portfolio?

Log into your account and your portfolio will automatically appear in the left side navigation bar. You have the option to view both personal and group accounts. Just select the portfolio you wish to access using the drop-down menu in the left side navigation bar.

In my portfolio, what is meant by Funds Donated, Funds Loaned Out, Current Balance and Total Returns?

Funds Donated is the total amount of funds you have donated to MEDA Trust since you opened your account.

Funds Loaned Out is the total amount of funds that are active in your account. This includes all current loans to entrepreneurs and any credits available in your account.

Current Balance is the total amount now on hand to spend.

Total Returns is the total value of your investment returns since you opened your MEDA Trust account. Because of the revolving nature of loans, your donation can fund additional loans throughout the active period.

How do I read the "loan details" of the loans I have helped fund?

Every loan profile contains some basic information about the client and the terms of the loan. Below the profile is a status bar that indicates the amount of the loan that has been paid off by the client. This will be updated regularly for you to view the progress being made.

I've lost my password... now what?

When you login to your MEDA Trust portfolio, simply enter your username and then click the button that reads "Forgot Password?" Your password will automatically be emailed to your registered email address for you to retrieve. Then return to the login page and continue.

What is MEDA?

MEDA (Mennonite Economic Development Associates) is a group of caring and compassionate business owners and professionals who, over the past 50 years, have invested their faith, abilities and resources to help the working poor around the world. We believe in giving dignity and joy to the working poor by helping them grow sustainable, locally owned small businesses that are not dependent on charity for survival. We believe in innovative international development that will provide a future for families and whole communities struggling with poverty. Through creative initiatives, smart planning and proper execution, MEDA has become a world leader in international development, working closely with governments, foundations and businesses.

Find out more about MEDA.

Why create a web site for microfinance loans on the internet?

At MEDA, we believe in creative approaches to international development. Technology has opened up new opportunities for people around the world to help the working poor. A web site allows more people worldwide to contribute to those living in poverty and feel connected with real people accessing these loans.

Why give loans as opposed to giving seed money to entrepreneurs in need?

MEDA Trust wants to contribute long-term solutions to poverty, not simply short-term band-aid solutions. We support local microfinance institutions that provide strong, sustainable support for ongoing business growth. MEDA believes in helping local financial institutions provide services to their community. These institutions will remain long after MEDA leaves, providing a way for the working poor to rise above poverty and discover the dignity and confidence that comes from earning a living.

To see the value of this approach, follow your own portfolio's report on "Total Returns." You will see the value of the loans made exceed the amount of your initial contribution.

How does MEDA choose the microfinance organizations it works with?

MEDA chooses organizations to work with based on a strict application process. MEDA is a recognized world leader in microfinance and our models are adopted in countries around the globe.

How does the MEDA Trust web site maintain accountability with microfinance institutions in international locations?

MEDA Trust maintains regular audits of all microfinance institutions they partner with. In addition to regular visits, all microfinance institutions have staff trained by MEDA. Each institution meets all legal requirements for the country of origin and we maintain a strict standard.

Do you only work in Afghanistan and Nicaragua?

MEDA has been directly involved in developing rural and urban microfinance and training facilities in Haiti, Jamaica, Bolivia, Tanzania, Russia, Mozambique, and Romania. Several of these programs have graduated to fully sustainable, independent financial institutions. MEDA is developing partnerships in many other countries, including Pakistan, Egypt, Angola and Argentina. MEDA Trust may add new partners to this site as systems and partnerships are developed.

Am I giving a loan or making a contribution?

MEDA puts money into its partner microfinance banks to be used as capital for the working poor. When you make a contribution to MEDA Trust, you are contributing to the programming of the microfinance bank. This money is then lent to micro-entrepreneurs to grow their businesses.

Do I get a tax receipt?

Tax receipts are issued for all contributions to MEDA Trust and can be used for income tax purposes in the US and Canada. If you are contributing to an individual or group account you will get an individual receipt. Organizational accounts are receipted as an organization. Tax receipts are issued immediately following your donation to MEDA Trust.

Once the loan is repaid do I get my money back?

Your donation is committed to helping entrepreneurs and may not be withdrawn from MEDA Trust.

Who keeps track of the loans?

All loans are carefully tracked by local microfinance institutions in the originating countries. Institutions look after applicants, applications and the paying back of all loans. All information is connected with MEDA Trust via the Internet and all loan information is updated regularly.

What is a bulk loan?

While most loans on MEDA Trust have regular (often monthly) payment schedules, some sectors, such as agriculture, typically involve lump-sum repayments of loans at the end of the loan schedule.

The repayment of the loan in bulk form typically corresponds with harvest or the end of season. Small payments may be made between the start and end date of the loan, but the majority of repayment comes at the end. Loan terms can last anywhere from six months to two years, depending on the nature of the loan and the business cycle 

What about interest?

Entrepreneurs who receive loans through an MFI are charged interest at an affordable rate. While that rate may be higher than North Americans pay to their banks, MFIs provide a high level of service to their clients. They visit clients in their homes, often in remote rural communities. Some MFIs provide business and financial skills training.

These small institutions must cover these costs and make a small margin so they can grow and serve their communities. Without expansion, they cannot meet the needs of a growing population.

Interest earned on loans helps an MFI to recover the cost of delivering their services, which ensures their long-term viability. Free credit services that are sometimes available in the developing world can distort local markets and ultimately do not provide a sustainable option as the project comes to an end.

As the microfinance industry matures and more competition comes into the marketplace, rates may become lower as operating efficiencies are realized.

[MEDA Marketplace magazine, July/August 2010, has an article that discusses the high cost of providing microfinance services to the poor. Click here to read more (Acrobat PDF).]

Why am I not seeing repayments as scheduled?

On the whole, microfinance clients are trustworthy and repay on time. A number of factors may be at work:

• Nicaragua, for example, is feeling the impact of the worldwide recession, which can challenge even the best-intentioned microcredit clients.
• Terms of loan – Loan products are often designed specifically to meet the needs of the business cycle of the client. For example, in agriculture, payments may be less frequent, and tied to the growing season of their crops.
• Technical challenges – It is not unusual for developing countries to face a variety of technical challenges that may hamper their reporting efforts.

What does “technical assistance” entail and why is it important?

MEDA draws from its years of experience in microfinance to share its knowledge and expertise with the partner MFIs it works with. Technical assistance usually involves training that enables the MFIs to operate more efficiently and serve their clients better. In the long term, the technical assistance provided by MEDA will help the MFI become a stronger institution.

What happens when I “reinvest” my credits into additional entrepreneurs?

When you see repayments appear in your portfolio, you are witnessing the actual repayment progress of the selected entrepreneur. A database connection between MEDA Trust and the partner microfinance institutions makes these types of live updates possible.

Through redistributing these repayments to other MFI clients, you can see how microfinance has an ongoing benefit in a community as funds are paid back and re-loaned to other hard-working entrepreneurs.

What if I forget to reinvest my credits?

Credits that remain in your account are still being reinvested by the microfinance institution to fund ongoing loans to entrepreneurs. This ensures these funds can impact the lives of as many entrepreneurs as possible.

What happens if my client defaults on his/her loan?

Microfinance institutions (MFIs) traditionally have strong loan portfolio performance. By that, we mean that the rate of repayment on loans is high – well above 95%. In general, that is strong, by North American standards. As in North America, women in developing countries tend to repay loans better than men, and the poor are often more reliable than the rich in paying off their loans.

Like everywhere else in the world, businesses in the developing world have failures – it's a normal part of doing business. MFIs have systems to work with a client in default on their loan to identify possible solutions. Various factors can lead to an inability to repay a loan.

Similar to what happens with most financial institutions, if a client ultimately fails to repay their loan, that money is lost from your portfolio. You are sharing the risk – albeit a small risk – with MEDA, the institution and the client.

How does the money I contribute towards a loan find its way to the entrepreneur?

Funds deposited in your account are directed into the programming of one of MEDA's carefully chosen microfinance institution partners. Money in the institution portfolio is then lent to micro-entrepreneurs to grow their businesses. Money that is paid back by entrepreneurs is returned to the MFI's portfolio and used for additional loans to hard-working entrepreneurs.

If no one chooses clients, are they given a loan?

Entrepreneurs who meet microfinance institution requirements have been approved for loans and are given loans regardless of whether they are chosen by a donor. The microfinance institution has its own portfolio that will fund all clients approved for loans that are not selected through MEDA Trust.

Can I email/mail loan recipients?

It is important from a legal, moral and security standpoint to maintain the confidentiality of individual clients. People living in poverty have the same right to confidentiality as we would from our bank. Entrepreneurs who receive loans have a direct relationship with the microfinance institution in their community. They do not want their personal and financial information linked with their names and village location and made available on the global stage of the Internet. In areas where there are security concerns, protecting the private information of the entrepreneurs is especially important.

Can I get any more information about loan applicants?

Client treatment and confidentiality is very important to MEDA. Information given on the web site is all that will be shared. MEDA Trust recognizes that making client names and locations available would add the personal touch for people in North America but we believe that people in developing countries deserve the same rights to confidentiality as we do in North America.

MEDA Trust will put selected, client-approved stories and information on the web site to give you a more complete understanding of the types of loans, businesses and families that are being impacted through microfinance.

Are entrepreneurs on the site real clients?

Every client who receives a loan is a real entrepreneur with a real business. These women and men are receiving loans and are growing their businesses because of the funds they receive. The clients are not receiving handouts and are required to pay back the entire loan with a reasonable interest rate.

Will my contribution go directly to benefit the entrepreneur I’ve selected?

Your contribution will go towards funding loans at the partner MFI where the entrepreneur you selected received her loan. Due to the costly logistics involved in connecting each individual contribution to a specified entrepreneur, MEDA Trust instead designates the contributions to be used by the MFIs to support the loans of entrepreneurs who are “next in line” to receive funds. This policy reduces the financial burden on the partner MFI and provides more flexibility for the MFI as it connects its limited supply of capital with a great demand for loans.

Selecting an entrepreneur gives you the unique opportunity to track their progress and witness first-hand how microfinance can benefit entire communities as loans are repaid and re-lent to other entrepreneurs.

What if I choose to reinvest with clients in another country?

The funds originally designated for clients in one country remain with MEDA's microfinance partner in that country. In the longer term, these funds can be used to capitalize other MFIs or MFIs in another country. However, you are free to follow clients in other countries through your portfolio.