Mekedis is a single mother of five children who lives and farms in the Dengeshta community. She is also one of 14 recipients in her community to receive a recent micro loan from Project Ethiopia. This year we established a second micro loan fund that will benefit residents of Dengeshta. We approved our first round of loans in early May, 13 of which were made to women.

So, what exactly are recipients able to accomplish with a micro loan and how does it help them generate income for their families? Mekedis is a great example of the impact a relatively small loan can make.

Mekedis received a loan of 10,000 birr ($345) to start a business raising sheep. She purchased three (3) female sheep for reproduction and four (4) males to fatten for the holiday season Over the course of her loan, Mekedis will:

• Fatten the male sheep to sell in November for 3,500 birr each.
• Invest the 14,000 birr from the sales to purchase another six male sheep.
• Fatten and sell those six male sheep for an estimated 21,000 birr.
• After repaying her loan and accounting for the cost of feed and materials, Mekedis will have 7,000 birr profit, 3 female sheep, and 3 – 6 lambs.

Project Ethiopia micro loans charge 5% interest compared with 13.5% – 22% at other institutions. Our loans target those who do not have access to other lending opportunities and sources. We begin by encouraging individuals to set up an account at the savings and credit association and to save regularly. Applicants can request a loan up to six times the amount they have in savings. To date, we have made 90 loans with a repayment rate of 100%.

There are 34 kebeles (communities) in the Dangla region and our goal over time is to establish a revolving micro loan fund – $5,000 in each fund – in each of these communities. Our two existing funds support the Bacha Berayta and Dengeshta communities and we are excited to announce that we will add a third fund in 2020 to support residents of the Girarghe community!