Small Business Development
The Small Businness Development (SBD) program has worked with the help of an Ecuadorian business student to provide free individual consultation and basic accounting services for local small businesses. With this approach, MPI works to develop and implement specific, individualized strategies for each of these businesses. Program Directors personally oversee the execution of practical and sustainable improvements to give local small businesses a better chance at success.
There is a great need for low-interest micro-loans in Ecuador’s Chillos Valley. As the Oxford Microfinance Initiative reported in their April 2012 market analysis of the region, while there are many existing sources for loans (banks, cooperatives, loan sharks), they all provide credit at exorbitantly high interest rates (on average between 20 and 25%), making it very difficult for loan recipients to pay them back. Manna Project International’s mission includes promoting the sustainable economic and social development of the Chillos Valley. The SBD program proposes to fill the gap in the microfinance market, providing microloans to entrepreneurs and small businesses at an interest rate of 9%. We see the current lack of access to affordable credit as an impediment to the entrepreneurial potential of the inhabitants of the Chillos Valley and hope that by providing capital to local small business owners we can assist them in making their businesses more innovative and most importantly more profitable.
Working with the Patronato (the social service branch of the town council), we are currently first providing a five-week course in agro-business planning and management to around fifteen community members from the semi-rural barrio of Jatumpungo. At the end of this course, those interested in receiving a loan will submit a business plan and we will select a group of 4 participants to give a loan to. They will be given a maximum of $400 per person, to be paid back over 4-8 months (corresponding with the growth cycles of their greenhouse crops) at an annual interest rate of 9% (which adds up to a total of $12). Our hope is that they will invest these loans in new and simple technologies for their greenhouses (irrigation, fertilizer, better tarps, etc) so that they can produce and sell more and start earning a significant income from their land. If this first loan cycle goes well, we will be seeking to reinvest in a new cycle, and hopefully our experience gained from this one will help us scale the project to reach more beneficiaries.