TCP Global identifies change-makers already working effectively in marginalized communities, then partners with them to strengthen their programs. Funding for micro-loans enables local partners to economically empower their clients, adding a valuable tool to their anti-poverty toolbox. Micro-loans are definitely not a distraction from the partner’s primary mission. Rather, the extra income achieved thanks to micro-loans, helps the partners’ clients better achieve the primary mission.
TCP Global provides incentives for successful implementation but allows local partners to define the structure that works best for them and their community. As the Peace Corps trains PCVs - “The Peace Corps and many other development organizations have come to realize that organizational development results are greater and longer lasting when the individuals involved with the organization (stakeholders) become active participants in a positive change process.” (An NGO Training Guide for Peace Corps Volunteers - page 38).
By partnering with existing organizations that already have salaries, rent and overhead covered, TCP virtually eliminates administrative costs, thus allowing 100% of donations to directly support micro-loans. By working with partners that have already demonstrated an ability to effectively serve a marginalized community TCP Global can safely enter a trust relationship, empowering that partner to develop local solutions to local problems.
TCP Global’s only requirements are that the loans be for revenue-producing activities for impoverished entrepreneurs, that the interest charged be no greater than what banks charge for similar loans and that the activity be in compliance with local regulations. We suggest small and short-term loans because those are less burdensome for the borrower and less risky for the loan administrator. We recommend that interest be as close as possible to what banks would charge so that the borrower’s eventual transition to the formal banking system will not result in a huge jump in interest charges. The final decision, however, is left to the local administrator.