Frequently Asked Questions

Ukraine UHDP clientDo you have a question about MEDA?
Please let us know – either by sending an email to or by contacting us by phone at 1-800-665-7026.

  1. How does MEDA decide where to work in the world?
  2. How do you determine the scope of the work?
  3. How does MEDA choose partners?
  4. What does the “Mennonite” in MEDA mean on the ground in international program areas?
  5. How does MEDA work together with other Mennonite organizations?
  6. What percent of interest does MEDA charge for microfinance loans? How does this compare with interest generally charged by other organizations?
  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?
  9. Is it true that MEDA is only for business people?
  10. How do we use donated funds?
  11. What is MEDA's stance on the recent controversies of microfinance institutions (MFIs)?

  1. How does MEDA decide where to work in the world?
    MEDA attracts opportunities from all over the globe. We develop programs that provide the best fit between our skill set and the resources available. We use the model of the four-legged stool:
    Need – We work among those of the poor who are "economically active" – micro-entrepreneurs, small farmers, poor families who are actively engaged in production or trade – and who will benefit from increased access to capital, markets and technical assistance.
    Product that we can deliver – We offer economic development that we can provide on a business basis – market access, capital access and training.
    Partner – We look for strong local partners. (See question 2 below for more.)
    Funding – The project must have donor interest. Contributions by MEDA supporters serve as a jump-start, and are then multiplied in impact through other funding sources.

  2. How do you determine the scope of the work?
    The scope is usually decided by our partners – such as 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, scope 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 defining the scope of the work is the breadth and complexity of the value chain. 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. Whatever the scope of the project, MEDA attempts to create business models that can be replicated by others.

  3. How does MEDA choose partners?
    We seek those who share our values and principles. We achieve the most sustainable partnerships when (in declining order of preference): 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 international program areas?
    Based on our faith orientation, we believe it is important to live by a higher ethic, go the extra mile, and care about those we collaborate with. Sustainability and accountability are important to us. 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.

  5. How does MEDA work together with other Mennonite organizations?
    Our focus on business development sets us apart from many other organizations' areas of specialty, so there is not a lot of overlap in our work and their mission. Nonetheless, we collaborate where we can. We have worked with Mennonite Disaster Service in the Gulf region ravaged by Hurricane Katrina, and with Mennonite Central Committee on post-disaster business assistance in Haiti. By tradition we also invite an MCC representative to our board of directors, and have collaborated with MCC field programs in the past. We also participate in meetings of the Mennonite World Conference from time to time. Through The Marketplace, we participate in Meetinghouse, the Mennonite editors' association.

  6. What percent of interest does MEDA charge on microfinance loans? How does this compare with interest generally charged by other organizations?
    Entrepreneurs who receive loans through a microfinance institution (MFI) are charged interest at an affordable rate. In most MFIs an annual interest rate of 20-36% is normal. While that rate may be higher than North Americans pay to their banks, MFIs provide a high level of service to their clients. They visit clients in their homes, often in remote rural communities. Some MFIs provide business and finance skills training. These small institutions must cover these costs and make a small margin so they can grow and serve their communities. Without expansion, they cannot meet the needs of a growing population. Interest earned on loans helps an MFI to recover the cost of delivering their services, which ensures their long-term viability. Free credit services that are sometimes available in the developing world can distort local markets and ultimately do not provide a sustainable option as the project comes to an end. As the microfinance industry matures and more competition comes into the marketplace, rates tend to become lower as operating efficiencies are realized.
  7. What other organizations are involved in microfinance?
    There are some 10,000 microfinance institutions (MFIs) with over 100 million clients around the world, in an industry that is only 30 years old. A third of these organizations are dedicated solely to microfinance (eg. ACCION). For others (World Vision, CARE), microfinance is just one component of the services they offer. There is also a large number (more than 100) of investment funds, such as MEDA's partner, MicroVest, investing in MFIs around the world.
  8. What percent of the total staff are hired locally, and when does MEDA use volunteers?
    MEDA's first preference is to hire locally from within the country or community where we work, and 80% of our staff are hired this way. However, in recognition of MEDA's product leadership approach, a core group of global experts are 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 filled by paid staff. 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 varies 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 is "spun off" to local ownership, management and operation.

  9. Is it true that MEDA is only for business people?
    While MEDA has strong roots in the business community, anyone who shares a commitment to creating business solutions to poverty can be a MEDA supporter or member. You can choose to contribute to projects of personal interest, get involved with a local chapter or attend the annual convention or regional meetings. MEDA is governed by an association of members, individuals who choose to support MEDA and have voting member status.

  10. How do we use donated funds?
    Contributions by MEDA supporters serve as a jump-start to projects, and are then multiplied in impact through other funding sources. These can include government agencies such as DFATD or USAID, or private foundations such as The MasterCard Foundation. As a result, your donation goes further and helps to bring positive change to many more lives. This multiplier effect varies from project to project depending upon the terms of the contract with our sponsoring organization, but overall, private contributions are multiplied at least nine to one.
  11. What is MEDA's stance on the recent controversies of Microfinance Institutions (MFIs)?
    There have been several thoughtful critiques, as well as analysis of microfinance in recent years.  We would recommend some highly credible, well-researched publications such as David Roodman, author of “Due Diligence: An Impertinent Inquiry into Microfinance”, and Stuart Rutherford, Daryl Collins, Jonathan Murdoch and Orlanda Ruthven, authors of “Portfolios of the Poor: How the World’s Poor Live on $2 a Day”.  Each of these provide an in-depth look into some of the successes and challenges of microfinance in a variety of contexts, from India, to Africa and Latin America.

    At MEDA, we are working to expand access to financial services to the poor, not only credit but also savings and insurance, which are highly in demand and perhaps more needed than credit, which as many authors have rightly pointed out, is also debt.  We support a variety of banks and MFIs in countries from Nepal to Uganda to design and delivery safe and appropriate savings products for the poor, and we have made an investment in an insurance company in Haiti to help expand health and life insurance products to the poor.  These will complement the credit products available in those markets and help make poor households more resilient to shocks and to plan for the future.

    At the same time, we are working with industry groups such as The Smart Campaign, to ensure that our partner MFIs employ best-practice client-protection principles in their services, and to support the development of improved financial literacy and client education programs.  Even in developed countries like the U.S., uninformed loan customers (such as mortgage holders in 2008) can be detrimental not only to the household themselves but to the entire financial system.  We want to prevent these situations by focusing both on the financial institution side (better policies to protect customers) and the client side (better informed clients that make good financial decisions).