FAQ
Q: What is micro-enterprise and micro-finance?
A: The two terms are similar. Micro-finance is very small business loans (often less than $800) provided for people who otherwise have no ability to borrow money. The loans are generally repaid over 6-18 months. The loans are used to establish a micro-business. A micro-business might be:
- a sewing machine to set up a small business, sewing school uniforms for local schools.
- a printer or photocopier used to provide access to such facilities or provision of service for local businesses.
- a deep freezer, to store fish and other perishable food meaning stock can be bought in bulk, the quality of food is improved and unused freezer space can ‘rented’ out for additional income.
Q: Why is micro-finance important?
A: Many people in developing countries live literally from one day to the next – their entire earnings each day are used to buy food for that day with none left over to use as ‘start up’ capital for a business to generate a more secure source of income. Most are ineligible for loans from traditional banks. This means that there is often simply no capacity for many families to ever change their circumstances.
Q: Will the small businesses succeed?
A: Not always. As in the developed world, small businesses fail for all sorts of reasons. However, there are ways to maximise the possibility of success. The Awaken Mozambique Team provide basic training in business management before issuing a loan, to the Borrower. The Team continues to provide training and monitors the businesses throughout the life of the loan. The aim is to increase the potential for sustainability for each small business.
Q: What happens when funds are repaid?
A. When the Borrowers repay the loan it goes to form a capital fund that is drawn on by the local committee, providing long term sustainable source of funding for the organisation. The ultimate goal is to have enough funds in operation so that the committee administering the program in Mozambique can continue to support new entrepreneurs.
Q: Where will my donation go?
A: Both equally important your donation will be applied to either:
a. A new business of a micro-entrepreneur identified by the Team in Mozambique. Where possible, Awaken Mozambique Incorporated will provide you with details of the business you have supported.
b. Donations for education and training give micro-entrepreneurs the ability to access basic business training and ongoing support from the Mozambique team, providing an improved chance of starting a viable business give long term support to another family.
Q: Is my donation tax deductible?
A: Yes, if you are an Australian Resident for tax purposes be sure to provide us with your name and postal address and we will have a tax-deductible receipt sent to you. If you do not receive your receipt, please let us know.
