From the October 2008 issue of Investment Advisor • Subscribe!

Foreign Aid

John Ledford is making an impact on the lives of small business owners worldwide. The president of Ledford Financial, which predominantly serves business owners and entrepreneurs from its base in Orlando, Florida, initially connected with entrepreneurs in need of financial loans through Kiva, a micro-lending Web site allowing individuals to lend directly to entrepreneurs in the developing world. "I was fascinated with the concept of micro-lending and came across kiva.org in my research," Ledford recalls. "I made a loan for $100 to see how it worked out. It turned into a half dozen loans." In 2007, he established a formal program with Ledford Financial in which 1% of monthly revenues would be allocated to business owners featured on Kiva. "Each month an intern would go on the Kiva site, review those looking for funding, and then take our budget and sit with me. We'd go over the list and allocate to the different people," Ledford says. "Before we knew it we had thousands of dollars out there in micro-lends to people all over the world."

In order to learn more about the needs of the entrepreneurs he was aiding, Ledford traveled to the Dominican Republic with HOPE International, a nonprofit organization focused on poverty alleviation through micro-enterprise. Ledford met with banks that support micro-funds, as well as with several local business owners in need of loans. "What amazes me is that for literally $100 we can give people all around the world access to capital required to start a business. It has the effect of radically changing their lives," he notes.

Ledford reminisces about a woman in Honduras he had the opportunity to help. "She lives on the side of a mountain in a rainforest and travels weekly to the local city to the market and buys several bags of clothing. She transports them back to her home and spends the week selling the clothes door-to-door to her neighbors at about a 100% markup, providing clothes to those in her community." Recently, Ledford had the joy of standing in the Honduran woman's new three-room home that she had just built after starting her clothing resale business two years ago.

Taking the Next Step

"After doing this for a couple of years, we saw what it could do to help people and how exciting it is personally. I realized there was a great opportunity to connect people to what we were doing in a larger way," Ledford explains. Eventually, he established his own organization--Change Micro Funding, which is a tax-deductible micro-lending program. In the six months that the organization has existed, dozens of people have began to participate and Ledford believes the number will grow into the hundreds by the end of the year. "These people have a level of passion, but not the time and availability to do all the things I've done. They're extremely interested in the concept, though," he points out. "We're trying to provide the conduit that helps participants get involved in something greater than themselves and at the same time help these micro-banks around the world look towards a larger single funding source rather than get small loans from individuals to fund their operations."

Change Micro Funding has partnered with its founder's church to provide loans to entrepreneurs in locations where the church conducts mission work. In 2008, the church will visit five countries: the Dominican Republic, Zambia, South Africa, Thailand, and Guatemala. Members of the Change Micro Funding board will contact banks that have existing micro-lending programs within these countries to identify recipients of the organization's loans.

In the last 12 to 18 months alone, Ledford has donated more than $20,000 of personal money to various micro-lending organizations. His personal mission is to bring economic change and a solid infrastructure to developing countries through the use of micro-loans. Change Micro Funding allocates its resources so that 80% of funding is distributed directly to micro-lending, 10% provides charitable gifts within the lending countries, and the remaining 10% supports continuing research to advance the organization's mission. Volunteers staff the organization, so all of the contributions go toward the work of alleviating poverty in the world's poorest areas. "As advisors, one of the greatest opportunities is to give back and be agents of social change. We need to do all we can to help people, especially those who lack the opportunities we have," Ledford concludes.


Staff Editor Kara P. Stapleton can be reached at kstapleton@investmentadvisor.com.

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