Loan expands family business, builds brighter future

A small business loan provided through World Vision has helped Zarik, a mother in Armenia, to improve her struggling family store and increase their customer base.

Story and photos by Narek Kosyan. Edited by Shawna Templeton.
Published October 25, 2011 at 12:00am PDT

Zarik, a small business owner and mother of three, is proud that their store in southern Armenia has grown more popular.

After receiving a loan through World Vision, the family was able to significantly increase its business.

‘We could hardly make ends meet’

“Our family [has been] running a small shop since 2003,” says Zarik. The shop offers a variety of foods and household items.

In this remote, impoverished region of Armenia, employment opportunities are rare, and running even a small business is a tough task.

“We could hardly make ends meet, and used the limited working capital just to purchase the minimum amount of goods for the store,” Zarik explains.

After some hesitation, the father of the household, Andranik, decided to apply for a loan from SEF International, the local World Vision microfinance institution.

“Without any complications, SEF International approved our application, and we got the loan in December 2009,” says Zarik.

Empowering people to work their way out of poverty

Microfinance provides financial services to people like Zarik and her family who have no collateral, credit history, or access to traditional lending services.

World Vision donors provide these peer-to-peer loans. As the entrepreneurs repay the loan, the original donation is recycled, and then another entrepreneur receives a loan for his or her business.

Loan amounts range from $25 to $5,000, and the average microfinance loan cycle is 3 to 12 months. Loans are repaid at stunning rate of 98.7 percent.

Store enhancement improve business

For Zarik and her family, the loan was used to renovate the shop. They built a new annex to the building and diversified the range of goods. “Several months later, we had almost a new store,” shares Zarik.

Anna, Zarik's daughter, is now the accountant for their shop.“Thanks to the loan, we have considerably multiplied the variety of our goods, [and] constructed a meat department and new warehouse,” says Zarik. “We have also completely renovated the whole shop, making it more appealing for the customers.”

The income generated from the store has already started to increase substantially. “The income is enough, not only to pay the interest and main sum, but also to allocate enough capital for our growing trade and commodity circulation,” says Zarik.

A better quality of life

With the growth in business, they were able to hire their daughter, Anna, a recent college graduate, as an accountant for the shop.

“After the loan and business expansion, our family is living much better,” explains Anna. “We have been able to pay my siblings’ tuition fee for this year and are confident they will graduate from university without financial problems.”

Says Anna, an aspiring businesswoman, “Because of this loan and our expanded business, we have become much more confident for our future, our family, our prosperity and our business perspectives.”

Two ways you can help

Pray for families struggling to survive in tough economic times like these. Pray that microfinance programs would help many more hardworking people who simply need a helping hand to lift themselves out of poverty, like Zarik and her family.

Make a regular investment in hard-working entrepreneurs by becoming a MicroMonthly donor. Each month, you’ll be connected with a new entrepreneur so that you can follow their progress and watch their families thrive and grow with your help!