Caterpillar arm boosts micro-loan program

Heavy machinery giant pledges further $2.5 million for women entrepreneurs

The Caterpillar Foundation, the charitable arm of the United States construction machinery giant Caterpillar Inc, has pledged to continue its 10-year support to a project providing micro-loans to women across China.

Michele Sullivan, the foundation's president, said that since 2006 it has been supporting the non-profit organization Opportunity International worldwide, which helps create jobs and more sustainable incomes for families, with a particular focus on helping small businesses run by women in rural areas.

Michele Sullivan, president of Caterpillar Foundation. [Photo provided to chinadaily.com.cn]

Sullivan said many women in China want to start their own business or grow their existing firms, but find funding difficult.

She could not provide exact total loan figures for China over the past decade, but looking forward, the foundation plans to invest around 16 million yuan ($2.53 million) to provide vocational training for the children of migrant workers over the next two years.

"The loans scheme has been particularly successful in China. We have noticed that in many cases, if you help the girls and the women of the family the returns are far greater. The whole family benefits," said Sullivan.

"Around 90 percent of micro-loan requests we get are from women, and they have 97 to 99 percent payback. It's a very good investment.

"Every time we have made an investment in the past, we ask the NGO involved how many women and girls are going to be influenced by the grant. The foundation also values projects, particularly those that affect women and girls indirectly."

Investments never exceed a quarter of the total being sought by applicants, so that individual projects never depend solely on the foundation, if it decides to change its focus or cut its budgets, Sullivan said.

The Caterpillar Foundation has partnered with many non-profit organizations around the world, providing more than $600 million in charitable funding.

After 40 years in China, Caterpillar has become a key construction equipment supplier in the country with 29 manufacturing factories, four research and development centers, three logistics and parts centers, and more than 10,000 employees.

Sullivan said the foundation has helped OI China with loans for a wide range of women-run projects, from pig and mushroom farms, to convenient stores and clothing factories.

A good example is Zhang Yingxia, a woman living in a village in Anhui province, who in 2012 wanted to expand her tailoring workshop but had no money. A loan of 50,000 yuan from OI China changed all that.

"Every time I had looked for funding, I encountered difficulties. But that much-needed grant helped get me through that stage," said Zhang.

By the time she was applying for a third round of funding from OI China last year, she had more than 70 staff, mostly women whose husbands were working away from home.

In another case, the foundation provided cash for a scheme to centralize water supply among poor villages nationwide.

"In regions where there is lack of water resources, it's the women and girls who go to look for water while the boys go to school," said Sullivan.