Friends of Pariaman

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Friends of Pariaman was founded to assist families in the region of Pariaman, West Sumatra, Indonesia.

We believe that education provides the most basic stepping stone to help families emerge from poverty.  Our programs are

designed to provide a means of self-sufficiency and to assist families in enrolling their children in elementary school.

Charitable Activities

Friends of Pariaman provides charitable gifts to elementary school aged children at the beginning of each school year.  In each of our first three years of operation, we have provided two school uniforms, shoes, and school supplies to about 200 children from impoverished families.  The combination of our Microloan Program, which is designed to provide seed capital to establish sustainable home-based businesses, and our gifts of school uniforms, is intended to relieve the financial pressure that prevents families from sending their children to elementary school, providing a strong educational base for middle and high school as well as technical school and college education for those who are able to enroll.

Our activities are managed by an all-volunteer staff, with a local representative who serves on a contract basis.

Microloan Program

Friends of Pariaman operates a micro-loan program to women in low income households.  We believe that by providing seed capital for starting and later expanding small home-based businesses, we are able to alleviate poverty by providing the means for sustainable businesses, jobs, and providing the means for families to earn the money to pay for immediate needs such as food, shelter, and clothing as well as to enable families to send their children to school, hopefully providing an educational basis that will permanently assist in breaking the cycle of poverty.

Interest rates are set at levels that are intended to partially defray minimal operating and administrative costs and are intended to be significantly lower than alternative forms of borrowing in the target communities; such alternative forms of borrowing generally require some form of collateral or are offered at significantly higher interest rates. 

Credit terms generally average 12-months in duration with interest rates of approximately 7% per annum.  This compares to alternative lenders who provide significantly shorter loan periods (4 weeks or less) and annualized interest rates that can top 300%.  Generally, our borrowers do not have collateral to pledge to secure loans from traditional sources.  Of the 7% interest rate, 2% is allocated towards bad loan writeoff expense and 5% is allocated to administrative expense.  Our goal is to have a significant majority of our fund balance invested in microloans at any given time.  When money is repaid, we strive to immediately re-lend it to different individual borrowers. 

 As we can see below, $100.00 goes a long way.  The loan default rate on the microlending program has been negligible and in addition to contributions received from donors, we are able to re-lend principal that has been repaid by existing borrowers.  Our default rate has been approximately 2%.

One borrower took a loan for approximately $100 and used the proceeds to establish  roadside gasoline vending stall.  She repaid her loan in less than one year and now earns $3.00 in profit per day from the operation.  This money provides extra previously unavailable income and has enabled to provide financial support to her extended family.

Another borrower used loan proceeds to expand her home business of selling well known regional snacks called  "Sala" and "Ladu."   She repaid her loan within 12 months.  She is now the bread winner of the family, consisting of four children and an unemployed husband.

Another borrower used her loan proceeds to purchase a sewing machine,  which she uses to manufacture clothing and to embroider customers'  goods.   Her finished products sell for prices between $10-$50.

 

 

 

Friends of Pariaman, Inc. is a 501(c)(3) tax-exempt organization incorporated in the State of Colorado.  All contributions are fully tax-deductable as permitted by law.