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Microfinance Lending Platforms

microfinance lending

Kiva – Kiva is the world’s first person-to-person micro-lending website, empowering individuals to lend directly to entrepreneurs in the developing world. Kiva is one of the largest microfinance sites, lending almost 400 million dollars to date.  The people you see on Kiva are real individuals in need of funding – not marketing material. When you browse entrepreneurs’ profiles on the site, choose someone to lend to, and then make a loan (via PayPal), you are helping a real person make great strides towards economic independence and improve life for themselves, their family, and their community.  One hundred percent of the money you lend goes toward administering loans.  Kiva’s lending program is a great way to see the real impact your loan can make.  It’s a much more effective process when the lender can see what their loan is actually doing.  Additionally, you can choose to lend to someone whose interests match up with yours.  All Kiva borrowers have been screened by local field partners for eligibility before being featured on the website.  Throughout the course of the loan, you can receive email journal updates and track repayments. Then, when you get your loan money back, you can relend to someone else in need.  Upwards of eighty percent of Kiva users choose to relend.  Kiva’s repayment rate of 98% is very high, higher than most commercial banks in the United States.  As with any loan, if you are nervous about getting repaid, you can always diversify your loan through a few different borrowers.  Additionally, if you are nervous about lending in certain regions of the world, you can always choose a borrower in a different one.  Kiva also keeps the funds for loans in a separate account than the funds for business operations.  Therefore, if something were to happen to Kiva, creditors would not have access to the lending funds.  Kiva is a great place to lend money because you get updates from your borrowers.  Kiva really connects the user with the mission of microfinance.

LendForPeace is a not-for-profit Internet platform that allows individuals like you to make small loans to specific micro-entrepreneurs in the Palestinian Territories, helping to create economic and political stability in this region.  Founded by two Jews and two Palestinians, was created to enable people of all faiths and backgrounds to make a tangible difference in the Israeli-Palestinian conflict.  The founders believe that economic and social inequality are the two main inhibitors in sustainable peace between Israel and Palestine.  Fifty percent of individuals in this region live below the poverty line, despite a highly educated and entrepreneurial workforce.  Additionally, less than twenty percent of Palestinians qualify for traditional forms of credit.  The lending on this site is done through Kiva, and it focuses on entrepreneurs on the West Bank and Gaza Strip.  Since the lending here in done through Kiva, this platform has many of the same positive aspects that Kiva does, such as a high repayment rate and many borrowers to choose from.  Check out this site if you’re interested in making a difference in the Israel-Palestinian conflict!

Microplace -– MicroPlace’s mission is to help alleviate global poverty by enabling everyday people to make investments in the world’s working poor. Over the course of a year, the average person invests much more money than they donate.  Therefore, investment portfolios can be a powerful source of capital for microfinance projects.  You can easily designate a small percentage of your investment portfolio to go towards microfinance instead of stocks or private equity.  Through MicroPlace, an investor can make investments that earn financial returns while having a positive social impact.  MicroPlace gives your money to issuers who in turn finance projects on the ground.  These issuers closely evaluate and monitor the ability of their microfinance projects to pay back their loans, reducing the risk for you as lenders.  Unlike with Kiva, you actually earn interest on these loans, as paid back to you by the issuers.  You lend through PayPal, and you will receive quarterly interest payments made to this account.  Also, you will receive quarterly financial statements concerning your portfolio.  Once your investment matures, you can choose to get your money back or roll it over into another investment.  As with any investment, there are risks involved.  Security issuers on MicroPlace mitigate risk by working with microfinance projects that have a good track record, diversifying funds to several projects to spread out risk, and maintaining rainy day reserves in case some projects do not pay back. So far, none of MicroPlace’s issuers has ever failed to repay an investor.  MicroPlace is a good place to positively impact the world and earn a return on your investment.

MyC4 – MyC4 focuses on lending to small business owners in Africa, where the economy is rapidly growing but more than 380 million people do not have access to a bank.  If an entrepreneur needs money in Africa, they go to a MyC4 to present their project, what resources they will need, and how much they will pay in interest.  The MyC4 partner then makes a thorough evaluation of the business to make sure it provides healthy economic prospects for growth and can repay the loan and costs.  The due diligence process includes a background check, checking the businesses track record, and seeing if the business conflicts with the vision and mission of MyC4.  If the loan is approved by the MyC4 partner, it is uploaded to the marketplace for users to view.  There is an auction where you can choose the amount you want to lend and the interest rate, known as a Dutch Auction where the investors compete for the bid.  You do not have to lend the entrepreneur the full amount; you can split the loan among a few people.  You can start off lending as little as five euros.  Everyone from individuals to financial institutions can lend through MyC4.  Additionally, if you’re short on time you can set up automatic bids for projects.  Or, choose to give a loved one a MyC4 giftcard!  Normally, the people who offer the lowest interest

rates end up lending money to the business when the auction is over.  As the business grows, the entrepreneur starts paying back the loan with interest.  Once your loan is paid back with interest, you can take your money or relend it to another entrepreneur.  You can easily track your loans on the “My Account” tab.  Also, MyC4 keeps an up to date blog with company and industry information, including the reasons why loans are defaulting in some regions if this were to occur.  To date, 19,337 investors from 117 countries have lent 17,275,097 euros to 10,564 small businesses in seven African countries. – Based out of Prague, project – Electronic Loan Exchange Network – opens to European capital a new alternative to investment. Now in its sixth year of business, myELEN focuses on lending in Brazil, Bolivia, Mexico, Turkey, and the Czech Republic.  Through the portal everyone can fund a chosen borrower, a whole group of them or directly a microfinancial institution that procures financing. Moreover, everyone can fund now a poor entrepreneur and get back the principal together with firmly determined interest.

OptINnow – a new initiative from Opportunity International that pledges to end global poverty faster. How? You give a gift that funds a loan. That loan builds a business. And that business helps hard working families out of poverty. Opportunity offers a mix of loan products, including individual loans, group loans, and loans tailored to clients in the areas of education and agriculture.  A typical first point of entry, especially for women, is the Trust Group, which brings together 10 to 30 entrepreneurs who elect leaders, receive training, and pledge to guarentee each other’s loans.  This model also strengthens the community, calling upon group members to support each other and encourage each other’s success.  When the loan is repaid, it’s recycled, and loaned again and again. It’s giving that keeps going.

United Prosperity -United Prosperity presents you the opportunity to directly help poor entrepreneurs and transform the lives of their families and communities.  You select the entrepreneur to support and each dollar you contribute acts as collateral or a loan guarantee with a bank.  Based on the guarantee, the bank makes a loan of nearly 2 dollars to the entrepreneur through a partner Microfinance Institution.  The Guarentee-Loan-Impact model manages some of the risks associated with international lending, including mitigating currency risk and providing loan monitoring.  Once a guarantee has been made, the entrepreneur’s progress can be tracked online.  On loan repayment, you get your money back and you can choose to recycle it by guaranteeing the loan to another entrepreneur. Since their launch in May 2009 and as of June 2010, 850 families have received $165,000 in loans.

Veecus – Veecus is an interactive platform allowing all members of the network to browse projects of microentrepreneurs and personal pages of users and lenders. Projects are mainly focused in Cameroon, India, Cambodia, and Guatemala.  You pay a membership fee the first time you lend, and after that you can freely lend to all the different projects.  Veecus also provides you with your personal space online and your own blog.  You can show the collection of loans you fund to your friends, and highlight ones that are of special importance to you.

Vittana - Believe it or not, in most countries, college loans just don’t exist. Imagine: No matter how smart you were, how hard you worked or how good your grades were, if you didn’t have a bunch of money up front, you just couldn’t go to college. Your ability to raise a family, move up in the world and achieve your potential are forever limited, not because you didn’t have that potential but because you never got a chance. Together, we’re changing that.  Vittana’s mission to graduate a generation beyond poverty through the power of education.  They enable anyone with $25 to lend directly to ambitious students in the developing world.  When you lend, 100% of your money goes directly to the students, and more than 99% of students repay their loans upon graduation.  Vittana exits because in many places student loans so not.  In many cases, they are kept from their dreams by only a few hundred dollars.  After graduation, the average Vittana student triples their earning power.  Vittana works with carefully selected partners in more than a dozen countries.  These partners work to find students who are motivated to continue their education and they help to prepare them for success.

Zidisha Microfinance - Zidisha is an innovative nonprofit that lets ordinary web users make microloans to entrepreneurs around the world. Zidisha streamlines the ability of third-world entrepreneurs to secure start-up funds for their businesses at an average interest rate of 8% versus the 30% to 100% rates for other microfinance loans. Like eBay, Zidisha links borrowers and lenders directly, dramatically lowering interest rates. Unlike other internet microfinance websites that simply allow web users to fund microfinance programs, Zidisha offers the ability to interact directly with the entrepreneurs.  Lenders can post questions and comments, while borrowers share the progress of their micro investments and let lenders know about the impact that their microfinance investing provides. Zidisha’s peer-to-peer microlending model reduces the cost of loans.  The lower microfinance interest rates translate into larger profits for the entrepreneurs-profits that go directly towards the well-being of their families and their communities. Lenders propose their own interest rate for the funds that they offer to loan.  Loans are repaid in monthly installments and can be reinvested immediately.  Most entrepreneurs pay at least 20% less in fees with Zidisha versus a standard microfinance institution. If any Zidisha member in not completely satisfied with their performance, they will immediately refund 100% of the lender credit uploads, donations, and services fees paid by that members-even if the loans funded with the lender credit have not yet been repaid to Zidisha.

If there are any other microfinance platforms or resources that you think should be on here, feel free to email: “jerryostradicky (AT) g m a i l (DOT) c o m”

Category: Payday loans

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