Frequently Asked Questions

Updated May 12, 2008

Do you have a question about MEDA? Please let us know – either by email , or by phone, 1-800-665-7026.

1. How does MEDA decide where to work in the world?
   
   
2. What criteria does MEDA use to make decisions on the scope of the work?
   
   
3. How does MEDA choose partners with whom to work?
   
   
4. What does the “Mennonite” in MEDA mean on the ground in the international program areas?
   
   
5. When does MEDA work together with other Mennonite organizations at the international program level? Where?
   
   
6. What percent of interest does MEDA receive for microfinance loans? How does this compare with interest generally charged by other organizations also in microfinance?
   
   
7. What other organizations are involved in microfinance?
   
   
8. What percent of the total staff are “hired” locally, and when does MEDA use volunteers? How many people are hired in a typical project? 

1. How does MEDA decide where to work in the world?
   As the world has become more global, MEDA has been invited to do consulting assignments and to implement economic development projects all over the world. We develop our programs and offices to support them as needed, and withdraw when the project becomes self sustaining, thereby keeping overhead down.
   
   We use the model of the four-legged stool:
   
   
   1. Need – We offer projects where there is poverty that we can respond to among those who are poor, but "economically active" – micro entrepreneurs, small farmers, poor families who are actively engaged in production or trade – who will benefit from increased access to capital, markets and technical assistance.
      
      
   2. Product that we can deliver – We offer economic development that we can provide on a business basis – market access, capital access and training.
      
      
   3. Partner – We look for good local partners. (See # 4 below for more .)
      
      
   4. Funding – The project must have donor interest. The donations that we raise serve as a kick-start, and are then leveraged more than 5 to 1 through other funding sources.
   
   
2. What criteria does MEDA use to make decisions on the scope of the work?
   The scope of the work is not usually decided by MEDA, but by our partners – be they another NGO or a government – and may depend on the level of capital that they can access. If it is a project where partners are not yet in place, scoping becomes part of the project design exercise.
   
   The project must be small enough to be manageable, yet large enough to test the project model. The optimum size is negotiated with the donor agency and local partners.
   
   Another factor is the breadth and complexity of the value chain. The scope of the value chain* defines the scope of the work. *A value chain traces the system of processing, manufacturing, distribution, wholesale and retail that take goods from their raw state to the end customer. It is also a conduit for information both up and down the chain.
   
   
3. How does MEDA choose partners with whom to work?
   In partners, we are seeking those with whom we share values and principles. But in order of preference, MEDA achieves the most sustainable partnerships when:
   
   
   • We work with a business or institution that is already engaged in the same business and markets that we are promoting;
   • we work with a business or institution that is engaged in a similar industry or is already serving in other ways the clientele that we wish to reach;
   • We create a partner from scratch to serve the markets we wish to reach.
   
   
4. What does the “Mennonite” in MEDA mean on the ground in the international program areas?
   We are people within an organization who go the extra mile, who are caring about those we collaborate with, and live by a higher ethic. We believe that our faith calls us to live out our values by supporting business-oriented economic development programs that create sustainable livelihoods for the poor around the world, as well as in our own work settings.
   
   
5. When does MEDA work together with other Mennonite organizations at the international program level? Where?
   Our international program work focuses on business development, which is quite different from other organizations' areas of specialty, so there is not a lot of overlap in our work and mission. However, at the international program level, we stay in dialogue through various forums.
   
   We have a memorandum of understanding with Mennonite Central Committee on post-disaster business assistance, and one with Mennonite World Conference regarding sharing information. Currently, we are working jointly with MWC on the 2009 World Assembly in Paraguay. MEDA is also part of the Council of International Anabaptist Ministries.
   
   
6. What percent of interest does MEDA receive for microfinance loans? How does this compare with interest generally charged by other organizations also in microfinance?
   Interest rates are context and country specific. Microfinance does not mean cheap credit, but rather it offers access to credit to entrepreneurs who are too small to be served by banks. Microfinance institutions (MFIs) are often competing with loan sharks as the only available access to credit for clients.In most MFIs around the world, an annual interest rate ranging from 20-36% is normal. This reflects the high costs associated with providing many thousands of small loans and a more personal level of relationship with clients in a high-risk market. It may also include some technical assistance such as basic business skills training and support.
   
   MFIs are also reliant on relatively expensive capital. The risks inherent in microfinance relate more to the stability of the country and the currency in which the MFI operates than the risk of default on loans by clients. Most MFIs have less than two percent default rates.
   
   
7. What other organizations are involved in microfinance?
   There are over 10,000 microfinance institutions (MFIs) with over 100 million clients around the world today, in an industry that is now only 30 years old. Some organizations that serve MFIs are dedicated to only microfinance (i.e. ACCION, Opportunity International), while for others (World Vision, CARE, MEDA), microfinance is just one component of the services they offer. There are also a large number (more than 100) of investment funds, such as MicroVest, investing in MFIs around the world.
   
   
8. What percent of the total staff are “hired” locally, and when does MEDA use volunteers? How many people are hired in a typical project?
   By intention, about 90% of the MEDA staff is hired locally. On a project basis, MEDA's first preference is always to hire locally from within the country or community where we work. However, in recognition of MEDA's product leadership approach, a core group of global experts may be retained who move from project to project as dictated by program needs.
   
   MEDA may use some short-term volunteers for specific assignments, but in general, longer-term assignments are best filled by paid staff. However, many types of volunteer opportunities exist at the local chapter level, where professional and business expertise is often shared and welcome.
   
   The number of staff hired is variable depending on the size of the project, and can range from one or two for a small project to over 100 for a larger project. MEDA tries to leave behind a sustainable program, so MEDA staff numbers decrease as the project matures and can be "spun off" to local ownership, management and operation.