While many agencies and organizations provide small loans to low-income families, not all use the Village Banking method. The Village banking method has been shared widely with 40 voluntary agencies and development organizations who currently operate over 80 programs worldwide. While many poor families have ideas for fostering their own employment by creating small businesses, few can access the capital they need to begin. By virtue of being poor, they are cut off from this type of support because of lack of collateral or credit ratings. Even a small loan can stimulate productivity , enabling the microentrepreneur to build assets and purchase inventory at the best prices.
Loans are a renewable resource , which can impact entire communities.
A loan is borrowed, invested, and repaid, after which it can be used to stimulate yet another fledgling business. The Village Banking method is highly participatory in nature. It gives the beneficiaries a voice and it involves them in the development process. Members not only receive loans, they form cohesive groups who manage and collect repayments on those loans, who save diligently and decide on ways to invest those savings, and who progress together, forming networks for mutual support. By sharing their problems, challenges, and successes, clients learn and progress together.