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What is a Bank of Hope?

A Bank of Hope is a group of women who agree to work together and support each other in their businesses and other aspects of community life. The group does not become a bank until each individual in the entire group has met the conditions for becoming a bank. A loan officer will visit the women in their community for an initial meeting. The program is explained and the objectives outlined. The expectations for the women are carefully explained.

Women qualify to be a part of a bank by:

  • Being truly needy, i.e., lacking the resources and collateral to get commercial credit
  • Completing a simple business plan
  • Having a good reputation in the community
  • Possessing a realistic concept of what it takes to make a business work, and
  • Offering a service or product, which meets a need in the marketplace.


The Esperanza loan is made to the group (Bank of Hope). Each member must have a business plan that is reviewed and approved by the loan officer.

The name, Bank of Hope emerged because the groups of women who receive the loans from Esperanza usually have no other hope of receiving capital for creating business opportunities. These loans are their hope for the future.

The women are all dependent on each other for their eventual success. If one member defaults on her loan, the group is responsible for paying it back. This creates a high level of energy focused on helping each woman succeed. Only when each individual succeeds does the group succeed.

How big are the loans?

Initial loan amounts generally are around $125 for each new borrower. We have three levels of loan programs that range from $125 to $1,000. Women have the opportunity to advance to higher levels of loans based on successful borrowing and expanding business needs.

Do the women pay interest?

Yes, the women do pay interest. The loans range from four-month to twelve-month cycles. They pay commercial bank interest and commission rates, which are currently 3.7% per month. The normal “loan shark” rate is 200% per year. Usually, this is the only money available to poor people. The Banks of Hope are filling an urgent need, and are a welcome relief from the informal loan system.

Are poor women good credit risks?

Over the last twenty years, since these kinds of programs began in Bangladesh, poor women have proven to be extremely reliable. Worldwide, there is between a 95-97% pay back rate. In the Dominican Republic the program is matching those statistics.

What about personal emergencies that might inhibit loan repayment? Esperanza has a self-funded life insurance program that the women can purchase at the time of receiving their loan. It pays off the remaining loan balance if the borrower dies, 60% if a child dies and 50% if a spouse dies.

For other emergencies, the banks loan members cash from their group savings. This has assisted many families in time of need.

What about a savings program?

All loan recipients are required to save 10% of their loan value during the life of their loan. If they can, they are encouraged to save even more. This money is pooled in the Bank of Hope, with records kept as to individual participation. The Bank deposits the savings fund into a commercial savings account and interest is earned. Everyone knows that this money is available for future use.

May women receive more than one loan?

Yes. Women who have paid back their first loan, with interest and on time, qualify for another loan. Esperanza wants to stick with successful businesswomen and hopefully enable them to eventually move into commercial credit for their business needs.

What kinds of businesses do the women start?

There is wide range of business opportunities undertaken through these loans. Some include food preparation, vegetable/fruit sales, baking, used clothing sales, tailoring, laundry services, piece work for larger manufacturing companies, crafts, beauty salons, sandal making, etc.

What kind of training do the women get?

The women are trained in basic accounting and business skills during the period of time their loan is active. They also receive training to upgrade their manufacturing and marketing skills. Seminars are given in personal financial management as well. Link to Education and Training Page

Is income generation and job creation the only objective?

  • Increased income means freedom from hunger, better medical care, and education for their children, safer housing and other dreams fulfilled.
  • The most profound change that we hope takes place is in their way of thinking of themselves, their place in society, we want to restore the dignity and self-worth that has been stolen from them.


What other benefit are available to those involved in Esperanza’s microcredit program?

  • All borrowers are eligible to participate in a pre-paid health insurance plan. Esperanza has partnered with the Clinica Esperanza y Caridad (Hope & Charity Clinic) now is the “HMO” for the members of the loan program. Each member can pay a modest fee and receive medical care at the clinic for the life of their loan.
  • We also have a life insurance program for the members. For a very modest premium, the insurance will pay off their loans if they, their spouse, or children die.
  • We have a very well developed training program for women to learn more advanced business and leadership skills and money management.
  • All of these “pluses” build self-worth and dignity in our borrowers.
  • As Bank of Hope members work together in the normal course of managing their bank and the various business that the bank supports, the women begin to develop a deep sense of accountability and support for each other. At the regular membership meeting of the banks, personal, family and community issues are discussed. The women find, sometimes for the first time, that other women face similar difficult circumstances. They provide each other moral, spiritual and physical support in ways that most have never experienced before.
  • There are also very practical, and sometimes, life saving expressions of support for members of the bank. When disasters strike, the members rally around each other to provide not only moral support but often financial and material support as well. In a very small way, they develop an informal safety net to protect against the unexpected disasters.
  • All of this leads to an elevated sense of self-worth, dignity and personal confidence. After the obvious economic benefits from being a member of a Bank of Hope, the next most stated benefit is that the women gain respect and status from their husbands and other community members. This leads to profound changes in their perception of who they are as women and their place in the family and community. As dignity and self-worth are restored, they have hope for the future.

 
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