Like millions of Chinese, Fu Yajun left her hardscrabble life in the countryside for the promise of high wages at a coastal factory town.
But the work she found at a Guangdong shoe manufacturer was far from her dreams, and the low and unstable salary barely put food on her table. But a $600 loan changed everything."We didn't see a bright future working for others," said the middle-school dropout. "After that experience, my husband and I decided to come back home to start something of our own."
Fu and her husband turned to Wokai, a U.S. microfinance firm whose name in Chinese means "I start." Wokai provides microloans to more than 350 impoverished farmers in China -- with the funds coming from donors around the world. Nicknamed "Facebook for Farmers," a contributor to Wokai.org can choose exactly where the funds go. Farmers' profiles and photos are posted online and donors choose to whom and how much they give.
Fu had initially scraped together the couple's meager savings, hoping to take advantage of the rich soil next to their modest home and start a mushroom farm.
But setting up a small vegetable patch would cost far more than what they had, so Fu applied for the loan from Wokai and received the funds to buy fertilizer and supplies.
Founded in Beijing by Americans Casey Wilson and Courtney McColgan, Wokai opened its doors three years ago and has raised more than $130,000 from more than 1,300 people. Their aim: to connect contributors around the world with borrowers in rural China.
"In Inner Mongolia, we have a lot of people raising lambs and dairy cows, starting small dumpling and noodle stands," said Wilson, Wokai's chief executive officer. "Down in Sichuan Province, we lend to rabbit raisers, farmers and people starting food stands."
At Wokai.org, donors can contribute as little as $10. Unlike typical microfinance programs, loan repayments are funneled directly to another person seeking a loan.
"What we are trying to do is enable people to create a long-term impact," co-founder and CEO Casey Wilson said. "(Donors) get to track the bar of progress over time, and once the capital is repaid they can decide who it goes to next."
The cyclical nature of the donations has attracted many supporters.
"Once your money has been used and returned by that borrower, you can choose another borrower and recycle it that way. I think that's part of the beauty of the process," said Beijing-based lawyer and donor, Xia Li. "You can select any amount and any borrower you want."
Xia has chosen to support women in Inner Mongolia and Sichuan to raise ducks and pigs.
However, critics in the United States question why donors choose to give to China, where the economy is soaring at a seemingly breakneck pace.
"There are actually two Chinas," said Dan Touff, who is funding a Sichuan pig farmer. "If you look at eastern China, there is tremendous capital appreciation, there's a lot of money, they are awash with cash. But China also has the second largest number of poor people in the world."
Hundreds of millions of Chinese farmers live on less than $2 a day. Despite China's rapid growth, acquiring the financial resources to improve living standards is exceedingly difficult for a local farmer, if not impossible.
Large banks are reluctant to lend to the poor. Chinese banks typically grant loans of no less than a few million yuan -- a far cry from the modest amounts sought by individual farmers like Fu.
This is where Wokai fills a void. With little access to banking institutions, the rural poor often turn to loan sharks who charge exorbitant interest rates reaching up to 50 or 100 percent a year.
Wokai charges zero interest on its loans, which are administered through local microfinance partners on the ground, who screen and evaluate loan applicants. The local partners charge 16 to 17 percent interest in order to cover the cost of administrative services, but this rate is still less than a third of black market loans.
"We go to their homes," said Chen Jin, local loan officer. "We research their situation and we talk to neighbors to see if they're the right kind of people."
So far, Wokai's loan default rate is less than one percent.
Fu makes payments twice a month and has turned her original $600 loan into almost $15,000 in new business and farm investments. She has tripled the size of her mushroom farm and now raises four types of mushrooms to sell at local markets.
Wokai aims to expand the donor base to 500,000 contributors in the coming years, Wilson said. But it is a big job for a business that has only five full-time paid staff.
"We've been almost completely grassroots up to this point," Wilson said. "Luckily we've been able to raise enough funds to begin building our team and scale our impact."
For the Fus, the impact is already clear.
"Before we started this, our family could barely make ends meet ... the food we ate was so bad," Fu laughed as she recalled the not-so-distant past.
"Our standard of living was low with a monthly income of 1,000 (US$147) to 2,000 yuan ($294). Now, sometimes we can earn 1,000 yuan in one day with our mushroom business.
"Life is getting better now," she added. "We plan to make more money first, and then expand these mushroom plots. Later, we'll build a better home."
