LONDON (TrustLaw) - Aid agency CARE International UK and the Co-operative Group have partnered this week to launch a three-year micro-finance scheme backed by "Dragons’ Den" star Deborah Meaden to channel £1.5 million (about US$2.5 million) of loans from UK savers to entrepreneurs in developing countries by the end of 2012.
Most of the loans will go to women as studies from Goldman Sachs and others have shown that when women’s incomes increase they spend more of their money on the welfare of their families than men.
In the lendwithcare.org system people are encouraged to lend money from as low as £15 (US$25) to entrepreneurs varying from hairdressers, to people reclaiming coconut shells to use as a source of renewable energy.
They then repay the money you lend them using earnings from their growing businesses. When the loan is repaid the lender can then choose to support someone else.
“I like the kind of work that gives people a reason to help themselves out of a situation because I do worry that throwing cash at a problem is not always the answer,” Meaden, best known as one of the “dragons” from the BBC series "Dragon's Den" and an ambassador of lendwithcare.org , told TrustLaw.
“It just struck a chord in me and I think it is a sustainable way to get people out of the poverty trap,” she said.
In "Dragon's Den" budding entrepreneurs get three minutes to pitch their business ideas to five multi-millionaires, including Meaden, willing to invest their own cash.
CARE teamed up with The Co-operative, an organisation owned, not by investor shareholders, but by over six million consumer members to get more reach and more lenders across Britain to hit their target.
“The Co-operative’s six million members are very on board with the Co-ops ethical stance and they have a great brand presence in Britain,” Kathryn Richards from Care International told TrustLaw.
Meaden who travelled to Cambodia in March to see the scheme in action before she signed on said it is often the women who bear the brunt of poverty as they are the ones who take care of their children and households.
“Often when we spoke to women in Cambodia, their whole driving force was I want my children to have better lives than me,” Meaden said.