How was LEAD established?
LEAD Inc. was established upon the return of Rev. Dr. Samuel B. Reeves to Providence Baptist Church, located in Monrovia, Liberia. Dr. Reeves met with various business owners from his church to establish an NGO that would serve businesses involved in the economic rebuilding of Liberia. At the same time, business owners from his sending church (Madison Square Christian Reformed Church) in Grand Rapids, MI were meeting to work together with Liberian business owners in support of the rebuilding process. LEAD was designed to be a separate entity from the church, however, and not only for church members. LEAD was legally registered as an NGO with the Government of Liberia on October 19, 2005.
How is LEAD funded?
LEAD is funded through individuals, businesses, and foundations both locally in Liberia and in North America. Additional funding comes through fees collected through interest paid from loans.
How was the loan fund developed?
The loan fund is established in a 3:1 match. This means for every dollar saved by a Liberian business owner from the profit of their business, LEAD will give a $3 match through its loan fund. Of those three dollars, one dollar comes from Partners Worldwide, one dollar come from our North American Affiliate, and the third dollar is raised by LEAD through donations and through the revolving loan fund.
How is LEAD governed?
LEAD is governed by a Board of Directors, made up of Liberian business owners, pastors, and other advocates of Liberia’s economic development. In additional, Partners Worldwide and LEAD North America serve as an advisory body to the Board.
What is LEAD’s legal status?
LEAD is a Liberian-owned, non-profit, NGO/non-governmental organization, registered with the Republic of Liberia.
What is LEAD North America (formerly the NLG/Nehemiah Liberia Group)?
LEAD North America is a group of Christian business owners who have been instrumental in establishing LEAD. LEAD North America has been based at Madison Square Church over the last five years, and is currently expanding to including new church communities across North America.
What is Partners Worldwide and what is its connection to LEAD?
Partners Worldwide is a faith-based, non-profit, international partnership of business and professional people. Partners Worldwide works to alleviate poverty through job creation and business partnerships (www.partnersworldwide.org).
Since it was founded in 2005, LEAD has been an affiliate of Partners Worldwide, receiving support from Partners on everything from Board, staff, program and capital asset development. As LEAD becomes increasingly established and self-sustaining, this relationship has continued to grow and take new forms. One example of this is the business mentor network which Partners and LEAD are setting up, in order to support LEAD clients through mentor relationships with established business owners in North America and Liberia. Another example is Partners’ role facilitating the relationship between LEAD and North American partners, such as LEAD North America.
Does LEAD work only with Christians, or persons of all religious faiths?
LEAD works with clients of all religions. Reflecting Liberia’s religious diversity, this including persons of Muslim, Christian and indigenous beliefs.
LEAD was founded on Christian principles and through partnerships between churches in the US and Liberia. Christian belief remains central to LEAD’s development, education and mission, but inclusivity and respect for religious diversity is an equally important element of our programs.
Does LEAD work only with Liberians, or persons of all nationalities?
LEAD has worked with clients of various nationalities, but the vast majority of our clients are Liberian. LEAD will continue to concentrate most of its services and programs on Liberia business owners, since this is foundational to our mission.
How much does the business training cost?
LEAD’s trainings are free of cost. There is a registration fee of 25 LD ($.40 US) and an annual membership fee of 100 LD ($1.50 US) for PEI clients and 500 LD ($8.50 US) for NEI clients.
Does LEAD offer startup loans?
LEAD does not offer startup loans, a need being filled by other microfinance NGOs in Liberia. LEAD works exclusively with clients who have been managing their business for at least six months, and thereby shown a capacity for and commitment to business.
What is the “Missing Middle”?
LEAD’s mission is to target Liberia’s “missing middle,” a sector of Liberia’s economy which is not currently being met by the financial service sectors in place. The “missing middle” – also called SMEs (Small and Medium Enterprises) – refers to businesses that are not eligible for startup funds from traditional microfinance NGOs, because they are already established businesses. At the same time, they are not large enough to qualify for bank loans.
It is LEAD’s belief that this sector of Liberia’s economy has the highest potential for job creation and growth.
How is loan size determined?
For NEI clients (3 months training, 6 months savings), loans are given on a 3 to 1 match based on a client’s savings. For PEI clients (2 day training, 2 weeks savings), loans are based on the size of the business.
What is the interest rate on loans?
LEAD’s interest rate is 16%. Of this, 6% goes back to the loan fund to keep up with inflation. The remaining 10% goes toward the operating costs of LEAD.
What is LEAD’s repayment rate?
LEAD’s repayment rate averages at 90%. This is comparatively high for microfinance NGOs. This is an indicator of the success and impact of our training programs, which prepare clients to manage their loans effectively and responsibly, and generate strong relationships between LEAD staff and clients.
What happens when a client does not repay a loan?
Most delinquency issues are handled informally and resolved through leveraging staff relationships with each business owner, working with clients around challenges and setbacks, and revising the payment plan if necessary.
When a client becomes seriously delinquent, LEAD initiates a formalized warning period, which the client is notified of in writing. If a client remains delinquent, LEAD initiates a legal proceeding in order to recover the loan.
How does LEAD plan to be financially stable, looking ahead to the future?
The interest and membership fees that business owners currently pay are not enough to make LEAD financially independent at this time. LEAD continues to be dependent on the donations of individuals, businesses, and foundations. As Liberia continues to recover, it is anticipated that LEAD will be able to increase those fees to make it sustainable. LEAD Liberia and LEAD North America continue to look for other partners to make a five year commitment for investment to allow for the opening of new offices in new counties, believing that in a five year period, each office will be self-sustaining. □