Mennonite
Central
Committee

From field to city, MCC program in Brazil sparks businesses

Marla Pierson Lester
July 7, 2006

From a farmer growing peppers in Brazil's rural northeast to a single mother who gives beauty treatments in Recife, a MCC micro-credit program is helping people build a better future for themselves and their families.

Severino Alves de Melo, of Chã Grande, was a daily laborer on another man's farm when he received a loan to plant a small plot of green peppers. Funds from the sale of the peppers and from other loans helped him expand his farming and purchase animals.

Eventually, he was able to buy his own piece of property where he now raises organic crops.

FRAME, which in Portuguese stands for Rotating Fund for Micro-Entrepreneurs, includes four funds which have aided some 950 families since the program began in 1997. Each fund operates through community groups or associations, including some within churches. The association is responsible for making sure each member is able to repay his or her loan.

The program has some 425 active loans at any one time. Loans range from 200 reais ($96 Cdn./$85 U.S.) to 1,400 reais ($669 Cdn./$596 U.S.) and must be repaid after 14 months. Borrowers begin by taking out smaller loans; the largest loans can only be taken out after smaller loans are repaid. Borrowers pay 1.25 percent interest per month, funds that help the program operate and create capital to lend to others.

Three of the funds are in rural areas such as Chã Grande, where the majority of the loans are given to families for planting or clearing fields or raising animals.

The fourth fund is in the metropolitan area of Recife, where most loans go to women starting small urban businesses, including handicraft endeavors. Many of them are single mothers, such as Ana Maria Braga da Silva.

The difference the program has made for her is striking.

"Now I eat a lot better," she told Hildjane Soares Silva, a micro-credit coordinator for MCC.

"Before," Silva said, "her kids would open the cupboards and there was one thing to eat. Now they have some options."

The mother had begun a small business giving massages when she heard about FRAME through her Baptist church in the neighborhood of Janga. Through four successful loans, she was able to expand her services, gain training in additional beauty treatments and attract more clients.

Now, she is helping to start a new loan group in the Baptist church she attends.

As more entrepreneurs use the program to create or expand businesses of their own, FRAME itself is moving closer to becoming financially independent of MCC a long-time goal for the program.

"We think this gives more initiative for people to care for the program, to work hard at it and make sure things are going right," Silva said.