Questions

1. Why do you work with the Church?
2. How Religious is Five Talents?
3. Does all my donation reach the poor?
4. What Interest Rate is charged on the loans?
5. How big are the loans?
6. What happens when a client can’t pay back his/her loan?
7. What are the repayment rates?
8. Does the money really re-cycle indefinitely?
9. Are many women receiving loans?
10. How do you target the Active Poor?
11. Do UK business people really have anything to offer on a Mission Trip?
12. Are Mission Trips only for “Business” people?
13. Why are some programmes called “Five Talents” and others are not?
14. How professional are the Loan Programmes and their staff?
15. Why should I give to Five Talents?

Why do you work with the Church?

The Christian church has a very strong presence in Africa (approx. 300 million members), and the network also covers all of Asia and South/Central America (though less strong). This provides a powerful means to identify local partners – benefiting entire communities (not just Christians).

How Religious is Five Talents?

Loan clients can have any or no religious background. We do not discriminate in who can access our services. Our values are founded in the Christian Faith (anglican denomination), emphasising integrity, good stewardship, and service to the poor. Our leadership in the UK and overseas are Christian professionals with skills to provide a quality service. Our loan programmes are usually linked to an Anglican church as a means of reaching the poor in the community and providing local accountability.

Does all my donation reach the poor?

If you restrict your gift to the Loan Fund or Training Fund , then all the money will go overseas for the Loans or Training programmes. If it is restricted for the Administration Fund it will be spent in the UK on publicity, staff, overheads etc. which are necessary to facilitate the programmes. General donations will be allocated to the greatest need.

For existing loan programmes (e.g. Indonesia), new donations will increase the loan capital available for loans, enabling more clients and bigger loans. For new loans programmes (e.g. Tanzania), some of your donation will be used to set up the office and pay local staff.

What Interest Rate is charged on the loans?

Rates vary from country to country and are not always an appropriate measure. In Uganda a group borrowing £150 must pay a charge of £27 over 6 months. This includes the application fee, business training, loan insurance, and monitoring. The fees are set by the local Five Talents programme committee in the country concerned to reflect local conditions. Commercial banks charge similar or higher fees. The fees are set to cover local running costs, such as the salary of the loans officers, fuel, and office expenses in order to be self-sustaining.. The feedback from most clients is that they can afford to pay back the loans with fees. After paying back in full, most clients apply for second and subsequent loans.

How big are the loans?

The biggest loans are around £700 per person. The smallest are £30 per person. The loan itself is made to a group of 5-10 entrepreneurs who each take their share of the loan and who all co-guarantee the repayment schedule.

The average monthly wage in Uganda is around £15 per month, so a £30 loan repaid over 6 months is a significant cash-injection to a small business. Loan sizes grow with subsequent loan cycles.

What happens when a client can’t pay back his/her loan?

The following procedures apply in sequence:

• The Five Talents Loans Officer will visit the client and may authorise a 1-2 week grace period. He will offer advice and encouragement.
• The other group members pay on behalf of their delinquent member. They then repay one another on a private basis.
• The programme manager withdraws the shortfall from the group’s prior-savings account. They had to save 30% of their loan amount prior to disbursement.
• The group (and individual members) track record will reflect badly on applications for any subsequent loan from Five Talents.
• The Loans Officer continues to follow-up the client. It is written off as a bad debt after 3-12 months (depending on the local accounting practice).

What are the repayment rates?

The range across the current 13 programmes is between 80-100% repayment (June 2005). The rates can go up and down over time. Where loans are repaid late, the Loans Officers continue to follow them up, until such time as they are written off as a bad debt. A critical factor in achieving high repayment rates is wise group selection and follow-up by the Loans Officers. As we expand the reach of Five Talents to new clients and new programmes, this is always going to be a challenging area. But we anticipate some defaulters as a consequence of funding start-ups and working with the poor.

Does the money really re-cycle indefinitely?

Yes, but it depends on repayment rates (see above). The loan capital in each programme is loaned out to groups, and repaid by groups with interest, repeatedly. In a mature programme, the interest meets 100% of the running costs of the programme, leaving the loan capital intact. In some cases, the interest can exceed the running costs (e.g. 110%) in which case the local programme Committee can decide whether to buy a piece of equipment for the office (e.g. a computer or a motorbike), or save it for reserves, or transfer the excess to the loan account. In other cases, the interest is insufficient to cover all running costs and the shortfall is met by funds from the Five Talents International office (for young programmes) or from the loan capital (for under-performing programmes). This is carefully monitored through monthly reporting by both the local Programme Committees and by the Five Talents International office.

Are many women receiving loans?

In June 2005 we gave loans to a total of 4,910 clients of whom 3,339 (68%) were women. We have found, in line with other micro-finance institutions, that women on average have higher repayment rates than men. We are glad to empower women in this way, especially in view of the following quotation from the former President of Tanzania: “When you educate a man, you educate an individual. But when you educate a woman you educate an entire family and a nation”

How do you target the Active Poor?

The Active Poor are those below the poverty line (defined as a dollar a day) who are seeking to help themselves through employment or self-employment. Most Five Talents programmes are located in poor areas, and the active poor join the programmes through self-selection. Loan Officers occasionally reject applications from middle-class entrepreneurs seeking loans, even though such clients might be easy “profit centres”. In most cases the middle classes prefer individual loans and they do not want to co-guarantee loans in a group methodology

Do UK business people really have anything to offer on a Mission Trip?

Yes! Most UK business people are trained to think in a certain way – identifying markets, the importance of revenue, location, packaging, promotion, niche marketing, minimising costs, handling cash, book-keeping, planning, appraisal, evaluation etc. etc. Many entrepreneurs in developing countries do not think in this way (some do!), and a fresh perspective from someone outside can often unlock an important idea. The knowledge is easily transferable through training, discussion and coaching.

Equally, a Peruvian entrepreneur (for example) has skills in relationships, commitment, innovation, and language which a UK business person would dream for. The intention is to share these skills and ambitions for the common good, not patronising or manipulating one another, but encouraging and nurturing one another.

Are Mission Trips only for “Business” people?

The trips are designed for business people of all types. However, you don’t necessarily have to be an entrepreneur. Those in the caring professions and students are also welcome to apply. We particularly welcome women, since they form the majority of loan-clients, and it is encouraging (both ways) to meet and share experiences.

Interested persons should request a trip Application form. We check suitability and we limit group size in order to make a successful trip.

Why are some programmes called “Five Talents” and others are not?

“Five Talents Uganda” is now established as a national micro-finance institution (MFI), and all of the Uganda projects bear the Five Talents name and logo. This was because the Uganda projects were the first ones supported, and because the local groups requested to use the name. Since then Five Talents has supported many other local MFI’s which had (and have kept) their own local names – for example GERHATI in Indonesia; Centre for Community Transformation (CCT) in the Philippines. Our preferred method is to support existing MFIs and not to start new ones from scratch, hence the project names are often locally specific.

How professional are the Loan Programmes and their staff?

All supported loan programmes are managed by local Boards made up of local business people and Christian leaders with good female representation. These Boards are responsible for recruitment of the loans officers, book-keepers/accountants and project managers. In general, the book-keepers are all University graduates qualified in their field. Project Managers must have prior MFI experience and suitable qualifications. Monitoring is based on performance measures, such as portfolio at risk, and operational self-sufficiency.

The Programmes Director or Executive Director from Five Talents International or Five Talents UK tries to attend at least one local Board meeting for each project each year.

Why should I give to Five Talents?

Your gift will help provide loan capital which will be loaned –repaid – loaned again – repaid – and so on indefinitely, helping many entrepreneurs to create jobs and lift themselves out of poverty.

For every £100 loaned to an entrepreneur, this will create a job and support on average 5 other people.

That same money can be loaned twice in a year- making 2 jobs and 10 people. Over 5 years, £100 will generate 10 jobs and benefit 50 people. Imagine what a gift of £1,000, £10,000 or £100,000 can do?! Your gift will be used effectively, multiplied over and over again.