Frequently Asked Questions

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What is Microenterprise?

Microenterprise is essentially small business. The Reckoning encourages and helps initiate small businesses among the poor in developing countries in a number of ways.

 

What is the difference between The Reckoning International (TRI) and Microfinance Institutions (MFI)?

Microfinance is a powerful tool in addressing poverty and underdevelopment, but it isn’t the only one. The Reckoning is really an “economic development” organization and we hope our approach is more holistic. Training, advocacy, investment, consulting, access to equipment, and creating a support network are all a part of our loan programs. We use the word “microenterprise.”

 

What is a lending circle?

In some situations, we lend to a group of 5-10 entrepreneurs at one time. Although each micro-business is autonomous, the group as a whole is responsible for paying back the loan. This creates a tremendous sense of accountability and support. Each entrepreneur has a vested interest in the success of every other person in the group. This naturally leads to a working environment of support, encouragement, and some healthy peer-pressure.

 

 

Why do you charge interest?

The Reckoning charges interest on our loans for a number of reasons: to cover the cost of the loan and transaction costs and to account for defaults.

Traditional microfinance institutions need to recover the cost of the loan. The Reckoning has a very different approach. No money ever comes out of the countries we are working in. When a donor helps make one loan possible, an economic catalyst is created. When the loan is repaid, the donation becomes another loan. One more entrepreneur is given a working chance. One more young person escapes poverty. We stress this to our partners as well. We let them know that defaulting doesn’t mean just an end to just one business, but it can potentially impact future borrowers in the community as well.

Because the capital is perpetually moving forward and no money is leaving underdeveloped regions, The Reckoning is able to keep interest rates very low. Traditional microfinance institutions need to charge 35-45% to cover the cost of the loan and all of their overhead. This is just below what unscrupulous village money lenders will charge. With our unique structure, The Reckoning can usually make loans to the poorest of the poor at 7-15%. This encourages quicker and easier repayment.

 

 

What countries are you working in?

Kenya, Uganda, Burundi, Dominican Republic, Ukraine and Nepal. The Reckoning also provides consulting services and support to organizations in additional developing nations.

 

Why don’t the poor go to a bank?

Traditional banks are not set up to service the poor. Banks will not make very much money on a loan of $200. Nor will they collect much on a very small savings account. Furthermore, the poor present a high level of risk. They often have no initial investment or collateral to secure a loan. No assets, no credit history, no job history, and no ability to read or write – subprime in every sense.

 

Does The Reckoning take people on short term trips?

We often take very small strategic teams. For more information please contact This e-mail address is being protected from spambots. You need JavaScript enabled to view it . This e-mail address is being protected from spambots. You need JavaScript enabled to view it.

 

You are a faith-based organization… what exactly does that mean?

We believe that God is bringing heaven closer to earth – this was the message of Jesus. God invites people to be a part of that process, to be the hands and feet of Jesus to the poor, marginalized, disadvantaged, and the least of these. We believe that faith is best expressed when it’s making the world a better place. We believe that salvation is big, and that God wants to redeem people, communities, economies, and the environment. Our faith motivates, inspires, and empowers all we do. However, our faith does not limit where we work or who we will assist.

Who Do We Help?

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A few short years ago, all Abraham had to his name was a button-down shirt and a pair of trousers. With a small loan from The Reckoning, he purchased a few simple hand tools and some raw material and began building furniture. He now sells his furniture.

read his story or find others like his