Paradigm Shift: Tackling Poverty with Small Business Loans

Paradigm Shift: Tackling Poverty with Small Business Loans

During his late 20s, Jedd Schroy had a successful business career and a new wife-about everything the world would say he needed. But Schroy knew God had more in store for him. With a heart for the poor countries of the world, developed when he was a young man on mission trips, Schroy used both his business and missions backgrounds to found Paradigm Shift, a ministry dedicated to ending poverty by using business principles and to sharing the gospel in the developing world. New Man talked with the 31-year-old founder about his exciting new ministry.

New Man: What is Paradigm Shift all about?

Schroy: Paradigm Shift is an organization trying to marry the physical and spiritual needs of the poor in the developing world. It's also defined by our hope in the local church. The whole premise of what we're doing is not just handouts. Handouts don't stop poverty, but empowerment does. That's found in Scripture. One verse we hold dear is Ephesians 4:28, which says, "He who has been stealing must steal no longer, but must work, doing something useful with his own hands, that he may have something to share with those in need." That's how Paradigm Shift operates. We can become a mission to transform poverty on the inside and outside of people. Some of the men we meet are providing for their families by stealing water from the city. If they can have the opportunity to get out of that lifestyle and still provide for their family, they can become a blessing to their family and to God's kingdom.

New Man: What is "microfinance," and what separates you from other organizations and ministries that use it?

Schroy: In the most simple terms, microfinance is small loans to poor people at reasonable interest rates. Big picture, there's about 10,000 microfinance groups in the world, and they're meeting 4 percent of the developing world's needs. These people can't get access to credit unless they go to credit sharks. Most of these people are entrepreneurs not by choice but by circumstance. Microfinance is not a panacea for poverty, but it's one of the keys and one of the most successful development tools for combating poverty.

In this past year, we have sat across the table from some of the leading microfinance ministries in the world, including several of the large Christian ministries' microfinance divisions, such as World Vision. What we found is there's a few things that separate us. It's not just the Christian ethos, which is shared by some of these groups, but the integration of that Christian worldview into what we're doing. At the end of the day, we're not just a microfinance organization, we're a hybrid of that and a ministry. We see that as-one-sharing our hope in Christ, and-two-expressing His love through meeting the physical needs of people.

We also work within the context of the local church. We're not a separate ministry, we want to empower the local church to use Paradigm Shift as a part of their church. Then we let them take over more and more of the program. That's a different model than what's' being used today.

The other thing is business training. A lot of microfinance groups don't see the value of this, but most of the people we're working with don't have any more than a 6th grade education. If you give them a loan, they can use their street smarts to make it work for a while. But we want to give them basic business skills for the long term, helping them understand things like marketing, price point and margins. A lot of these groups don't provide these things.

The other thing is a mentorship relationship. We do this on a voluntary basis through the local churches. Mentors meet every month with people to help them with real-life situations. This is a way to help business professionals in South Africa see how they can build up the kingdom of God using those skills.

New Man: How does the program actually work?

Schroy: We start people with a loan of $145 to be paid back over a six-month period. They receive business training and develop a plan to show how this investment of capital can help their business. Over the six months we help them. They pay off everything with 10 percent interest. It's not a lot, but it's enough to make it not a handout. With Paradigm Shift, the local churches handle the overhead costs, which allows us to offer this program at an incredibly low cost. Basically, it costs $40 for an entrepreneur to go through this six-month program. That includes the loan, business training, the mentoring and the biblical discipleship.

For example, say there's a church that already has a working relationship in the community. Say they do an after-school outreach. They'll go into the community and promote the program. They'll hold a meeting, and we'll come in with the church volunteers and tell them what's going on. Then we hold two trainings to help them grow their business and create a simplified business plan. At the end of that, they receive the loan and have a six-month plan to pay it back. During the six months, they have weekly meetings that help people to keep up with their plan, to motivate them, and to help with ideas. At the end, we meet with them, and they can receive more business training. The other thing is the biblical discipleship we go through, where we talk about who God is and what that means for your life.

New Man: Where does the name Paradigm Shift come from?

Schroy: It's kind of a triple entendre. For the entrepreneur, it's a perspective that God has something greater for their life than what they have right now. They can shift their paradigm from a life of poverty to a life with healthcare, education and other things.

Another part is the change in paradigms of the churches we work with. Many times we're compelled to feed the poor and clothe the naked, and many times we set out with the best intentions, but instead of doing something effective we've incapacitated people and fostered an attitude of dependence. We hope that empowering the poor and providing for the poor doesn't just mean giving them free things, but it means attacking the poverty they're in.

New Man: Your team isn't made up of what you would think of as typical missionaries. What led them to Paradigm Shift?

Schroy: All of the guys on our team are between the ages of 27 and 31. If you had asked them if they wanted to be a traditional missionary before hearing about Paradigm Shift, most of them would never have said yes. But when you ask them why they joined Paradigm Shift, they will say that this is not your traditional outreach. It is something that combines their skills and backgrounds.

For example, I worked for a full-service brokerage house swinging investments and retirement plans. But since I was a teenager I've always had a heart for the developing world, and my background with missionary groups like YWAM and my business training led me to found Paradigm Shift. We've got another guy on the team, Greg Skowronski, who was a successful businessman on Wall Street by the time he was in his late 20s. But during an adventure trip to Mount Kilimanjaro in Tanzania, he came face to face with poverty like he had never seen before. It was a world away from Wall Street. The trip put the seeds of discontentment in his life, and he ended up reconnecting with the Christian faith of his childhood. Now he gets to use his gifts and talents working with entrepreneurs in South Africa, assessing their business plans and giving them hands-on advice.

New Man: How can our readers get involved?

Schroy: More than any other sector, Christian businessmen understand Paradigm Shift and why microfinance is something they can relate to, and they want to help. If you check out the section of our Web site called Your40Story.com, you can learn how $40 can give a poor family access to credit and a way out of poverty. We are fully funded and operated by the contributions of Christians, which can be anything from yearly commitments to single donations.