EAFI Small Loan Initiative

Starting in 2002 Kate began helping some rural migrants with small scale loans in the Tujia and Miao minority area in Jihshou. A number of migrants had returned to the countryside to start small businesses.

Most of those women evaded the one child policy and struggled to avoid forced abortion. In the countryside the one child policy is more loosely enforced, but the standard of living is low and economic opportunity is limited. Entrepreneurs do not have a source for loans. Also, obtaining schooling for a second or third child is more expensive and there are fines for having more than one child.

EAFI Small Loan receiver

Here are some personal stories:

Ms. Teng, a native of Baojing, had three kids. After having two boys, she really wanted to have a girl. Having worked in Guangdong and Shenzhen for many years, she came back to Baojing to find there was no job for her. She had to pay high fees to send all three children to the local public schools ($520 per year).

Ms. Teng has three children and a big economic burden. Her third child (a daughter) was born in an attic to protect her from the authorities that would force her to be aborted. She paid a fine and could not find work in the formal economy. Kate Zhou personally loaned her $1000 to buy an apartment to live in.Teng also asked her relatives to use their houses as loan guarantees for more funding. She renovated an old building and turned it into a beauty parlor and hotel in 2004. In 2004, Kate loaned her money to pay back the bank loans. Within one year, she had paid back 50% of the $5000 loan.

By the end of 2006, she will be able to pay back the loans. During the process of getting loans and building a small business, Teng learned the skills of being an entrepreneur and fully appreciates the importance of property rights. She has hired more than 10 women workers, two of whom were former sex workers. 

Teng says: "It is great to be a boss. I am proud that I can provide economic opportunities for other poor women. The only man working here is my husband who is our security guard. He has been important and very supportive of me. Since he is shy, I am the one who has to deal with the tough world out there. It is hard that the debaters came to demand payment. I have to spend time and money on local officials who may decide to close down the place. We want to do good business and make things clear so that we do not give them excuses. Sometimes, some local bullies also come to demand service and money. We have to deal with them. I do not want trouble. It is hard for a woman to face so many different people. But I must do this for my kids. I hope they do not have to struggle like me. I hope that I can have enough money to send my kids to the best universities so that they can become professionals. I do not want them to become a private business owner. It is very tough and difficult."

Ms. Yu is another person who got some loans from Kate Zhou. She used 500 dollars to rent a room to set up as a beauty parlor in 2003. The money was also used to obtain hair products and tools required to run a beauty parlor. Kate transported these good herself from Guangzhou. After spending some time training with an acquaintance of Kates, Ms. Yu opened her beauty parlor and was able to repay the loan within one year. This is remarkable because the per capita income in that area is only $200 per year.

Several other such loans have been made, and all have been repaid except 3 that were made fairly recently. Some loan recipients repay their loans with goods that can be sold on the internet.