Microcredit program helps small businesses in Northern Illinois

Judy Zabielski (left)  and Laura Mueller, co-owners of Acacia Organics, in Barrington, Illinois, USA, benefitted from a microloan provided by the Barrington Breakfast Rotary Club.

Judy Zabielski (left) and Laura Mueller, co-owners of Acacia Organics, in Barrington, Illinois, USA, benefitted from a microloan provided by the Barrington Breakfast Rotary Club.

By Narayan Murarka, chair of the microcredit committee for the Barrington Breakfast Rotary Club, Barrington, Illinois, USA

For several years, microcredit projects have been helping eliminate poverty by providing small loans to poor women in developing countries. But the need isn’t always overseas. Sometimes, it’s a lot closer to home.

My club launched a program in 2010 that focuses on small businesses in our area which are facing a short-term credit challenge. We have provided financing to several businesses in the last three years, some of which have matured and been paid back in full with interest.

Here is testimony from one small business, which needed help last fall to restock their store shelves with specialty gift items like lotions, soaps, and candles for the Christmas season.

“We sold pretty much everything we brought in,” said Judy Zabielski, co-owner of Acacia Organics, which specializes in health, wellness, nutrition, and beauty. “(The financing) was timely to fill our store with healthy gifts. The personal care they showed us was so touching and we are very appreciative that they are helping to spread the word about our valuable services.”

We started our program with businesses in the local Barrington area but have now extended it to the area served by Rotary District 6440 (Illinois, USA). A limited number of loans (maximum amount of US$5,000) are granted at modest interest rate (prime plus two points) with full expectation of payback.  It is exclusively for entrepreneurial activity – not personal consumption (such as food, rent, medical expenses etc.).

The working capital for the program was raised through the generous support from our local community foundation, banks, businesses and individual Rotarians.

Our motivation is to provide opportunity – not charity – for people who wish to start or expand an income generating business venture by offering seed money in the form of a loan. This project is about helping those who are trying to help themselves. It addresses and responds to the entrepreneurial spirit of individuals who need a helping hand.

A key difference between our loans and a normal bank loan is that once the credit is granted, our club assigns a club member to serve as a mentor. The mentor will frequently talk with the loan recipient, assess progress, and offer advice or support as appropriate.

We’ve posted a YouTube video describing the  program and welcome questions from clubs wishing to replicate our program or start a similar one of their own. Email us at info@barringtonbreakfastrotary.org. Also tell us what you think of our program by email or below. Through Rotary, we can help others, strengthen local economies, and make our communities stronger.

9 thoughts on “Microcredit program helps small businesses in Northern Illinois

  1. Pingback: Microcredit program helps small businesses in Northern Illinois | Warsaw Rotary , Club 3393, District 6540

  2. In developing countries; Women needs a short training in different ways and a micro-credit/small revolving loans for establishing them. Fund should be interest free, but a minimum service charge may be imposed. Sk Abdul Hadi, R C Khulna North, RID 3280

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  3. Thanq very much for the info We are happy to share our experience as well Punch Rtn PP Prof R Panchanadhan R C Tiruchirapalli – D 3000

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  4. Narayan Murarka – excellent initiative – Rotary and Microcredit are natural partners – thanks for both the You Tube video (informative but brief) & this blog (a great way to connect interested parties). Now to grow the project what is next – what do you need? Founding President Rotarian Action Group for Microfinance and Community Development, Steve Rickard.

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  5. Altadena CA Rotary trains New Generations youth in how to write Business Plans as the essential step before starting a business, locally and globally. I’d like to apply your micro-credit program to our Job Creation & Entrepreneurship programs in high schools and colleges in District 5300 {.Pasadena CA to Las Vegas NE]. Please send what I need to get started.

    Also, we trained 4,250 newly graduated university students in 4 states of Nigeria through a Vocational Training Team last July. Our goal is to impact every state (36) by 2017, and have a micro-finance and m-SME financing program in place by 2020 with the Federal and State governments’ help. Maybe we can also help Nigerian Rotary Clubs to establish micro-credit programs as an add-on to the entrepreneurship training programs.

    C Ray Carlson, Chair, District 5300 Vocational Service (2010-14)
    crayc@me.com

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  6. Clearly and succinctly describes our MicroCredit Program … of great benefit to LOCAL small businesses – Think globally … Act locally …

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  7. This is a great project you have. My club has been trying to start a similar project in our community but have so far been unsuccessful. How do you raise funds for this project?

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