Gates Foundation Awards $6 Million to Expand Micro-Credit Loan Program

Freedom from Hunger, based in Davis, California, has received a four-year, $6 million grant from the Seattle-based Bill & Melinda Gates Foundation for its efforts to help women in developing countries fight poverty, hunger, and poor health, the Davis Enterprise reports.

The grant, the largest the international group has ever received, amounts to about 30 percent of its approximately $5 million annual budget. The grant will bolster Credit with Education, the organization's micro-credit loan program that offers women in Asia, Africa, and Latin America working capital ranging from $20 to $300 to set up or expand their home-based businesses. For instance, a woman who makes tamales at a roadside stand may use the money to purchase more flour and produce more tamales. "It's amazing what $25 can do for people when their annual income is only $300," said Freedom from Hunger president Dr. Christopher Dunford.

Their repayment history is excellent, Dunford said, with only a 0.1 percent default rate, because they receive the loan as a joint liability group, often numbering ten to thirty women, who vouch for the loan. If it is successfully repaid, they may then apply for a larger loan. "They see this as kind of a step ladder out of poverty, so they put a tremendous amount of importance on repaying the loan," Dunford said.

According to Dunford, the Gates Foundation has not given money to micro-credit lending organizations in the past, but it was struck by his group's program because when the women gather weekly or bi-monthly to make payments and deposit savings, they also participate in discussions facilitated by Freedom from Hunger representatives on topics like malaria, HIV/AIDS, family planning, and basic business management. So accepting a loan also means receiving health education, part of the foundation's mission.

The grant will also help the organization develop a prepaid healthcare system in which women pay a small, fixed fee to a local clinic to receive care for common health problems. "The most common reason people are stuck in poverty or fall back into poverty is health problems," Dunford said.

Crystal Ross O'Hara. "Helping Fight Hunger." Davis Enterprise 12/05/2005.