February 26, 2022

Micro Loans Update February 2022

The Micro Loan Scheme in Sri Lanka in partnership with the Rotary Club of Kandy, District 3220 and the Centre for the Handicapped.

In Sri Lanka the micro loan scheme has made a big difference to these Sri Lankans quality of life both financially and mentally as well as improving life for all of their families. 50,000 Sri Lankan rupees enabled Vijayakumar Rosalin to set up a retail business in Batocoloa; also N Thawamani to set up a retail business and 20,000 Sri Lankan rupees enabled V. Babymalar to set up his own photography service.   

In the Panchamul Valley, Nepal, the scheme has been running since 2013 and has directly helped around 450 families; there have been no incidents of families failing to repay. Other schemes have also been running in Nepal including a Goat Bank which was launched in 2015 and is a modification to the micro loan model. Goats are loaned out and when they breed, one of the offspring is given back to the Goat Bank. This project was fully funded by Northallerton RC at a cost of roughly £4400. It has been highly successful and has now been split into a number of mini goat farms.  A second goat farm was funded by a mixture of funds, some local, some £2000 from Northallerton Mowbray RC and £500 from the District 1040 Micro loan fund. It continues today as a sheep farm and has been moved to a different location for safety reasons. In 2020 a new chicken farm was launched and was funded by some of the surplus funds raised by Harrogate Brigantes Kids Aloud 2019 Monkey Boy concert.

Where are we now?

We have seed money in the bank to give to clubs for future loans.  All we need are local Rotary Clubs in District 1040 who would like to be involved and mentor partner Clubs overseas and Clubs overseas that are prepared to give and administer the loan.  To assist Clubs Roger Cannon, the District Microloan Lead has prepared two sheets to help guide clubs through the process - see below.


“A Hand up not a Hand out”

What is a Micro Loan?

The provision of a small loan (£10-£250)  for those who are too poor to have access to conventional financial services.

What is the purpose?

The loans are intended to promote economic development in communities, allow the less fortunate to

reclaim their dignity and provide a better life for the borrowers and their families by setting up (or

restarting) new businesses and opportunities.

What are the benefits?

 Provide finance, no interest is charged, no security taken and no legal redress in event of default.

How does it work?

 D1040 donates “seed fund” to an Overseas Club.  

 The Overseas Club grants loans, repayment terms are set and monitored by them within parameters

 set by D1040.  Businesses start, make profits and repay loans as agreed.

 The Overseas Club report back to the UK partner Club at agreed timescales, usually six monthly

 Loans roll over and the available capital is lent again to new clients.

Who can borrow?

This very much depends on local circumstances.  The list is endless.  To date - grocers, brick makers,

mechanics, farmers, jewellers, tailors - have benefited.

Where are the current schemes?

The scheme began in 2005.Schemes are currently working in Sri Lanka and Nepal.

How can you help?

 Identify an Overseas Club who might be interested in administering a scheme.

 Mentor a scheme as part of your International Services projects.

 Donate funds to the M L S district fund.

If you are interested in becoming involved, please contact:

Roger Cannon, District 1040 Micro Loan Scheme Co-ordinator

E: roger.cannon@rcchealth.co.uk  T: 07818 896866



“A Club Step by Step Guide”

  1. District Club identifies an interest in establishing a Micro Loan Scheme with an international Club.
  2. It identifies a Rotarian within the Club to act as the contact and mentor for the Scheme with the international Club and link with the District 1040 M L S co-ordinator.
  3. Contact the international Club to explain the requirements of the Scheme including the need to:
    • Appoint an “Appointed Officer”  who is the link person within the Club responsible for running the Scheme and providing reports to the UK Partner Club.
    • Open a dedicated bank account (two signatures) specifically for the M L S.
    • Sign a form M O U between the Club and District 1040 including the provision of a formal minute of the Club agreeing to administer the loan.
    • Submit a summary proposal giving details of the targeted purpose of the loans which must be used to start or re start a business.
  4. Obtain approval for the Project and Loan via District Co-ordinator.  Funds are sent to the international Club
  5. Following approval and funding the Appointed Officer is responsible for running the Scheme including the completion of a Pro forma for each borrower / loan; keeping records of all loans granted and their compliance regarding repayments.  Submit 6 monthly reports to Mentor Club.  Roll over loans and lend capital to new clients.

Roger Cannon, District 1040 Micro Loan Scheme Co-ordinator

Contact: E: roger.cannon@rcchealth.co.uk  T: 07818 896866

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