affordable credit to vulnerable female micro entrepreneurs
TRANSCRIPT
AFFORDABLE CREDIT TO VULNERABLE FEMALE MICRO ENTREPRENEURS
LIGADA MOZAMBIQUE
Access to affordable credit means entrepreneurs are able to afford to repay their loans
Current offer in Mozambique is scarce even when existent
Vulnerable female micro entrepreneurs face formal and informal barriers in accessing traditional credit
FORMAL BARRIERS TO CREDIT
Prohibitive interest rates; !
High collateral requirements; !
Lack of existent products adapted for the needs of target populations.
INFORMAL BARRIERSTO CREDIT
Difficulty in accessing banks; !
Not flexible banking hours; !
Women and others vulnerable individuals do not feel they can go inside a bank and ask for the available products.
"ENCOURAGING THE IMPLEMENTATION OF SUITABLE PRODUCTS TO THE MEANS OF LOWER INCOME HOUSEHOLDS COULD BENEFIT A COMPLETELY UNASSISTED POPULATION." !
The World Bank, 2013
Crowdfunding is an innovative and successful alternative
Ligada will support increasing the presence of
BUT WHAT IS KIVA?
Kiva is a lending-based crowdfunding that connects social lenders around the globe willing to provide affordable capital to vulnerable entrepreneurs
BORROWER STORY
LOAN TERM
FIELD PARTNER
LOAN AMOUNT
BORROWER PICTURE
By partnering with an extended network of NGOs, social enterprises and micro finance institutions, the 11-year-old online platform has provided $700 millions in affordable credit for 1.6 million vulnerable borrowers in 86 countries.
HOW DOES IT WORK?
4. Lenders are able to provide a minimum $25 loan to someone else to support a business. Kiva aggregates the money to crowdfund loans to borrowers and backfill disbursed amounts.
3. Field partners disburse loans to borrowers as they are needed and then collects their stories and photos to post on Kiva's website.
1. Local micro finance institutions, social enterprises and NGOs apply for becoming Kiva's field partners
2. Partners which fulfill Kiva's criteria are selected to receive a line of credit ranging from $50,000 to $4MM
5. Field partners collect repayment from borrowers and any interest charged to help cover operating expenses. Kiva does not charge interest from Field Partners nor provide interest for lenders
6. Lenders receive repayments and have the option to withdraw the money, donate it to help Kiva cover its operating expenses or lend it to more borrowers to make an even bigger impact
KIVA'S FIELD PARTNER CRITERIA
Strong commitment in addressing vulnerable people’s needs;
Have at least $100,000 in assets or operational revenue;
Be legally registered in Mozambique and capable of accepting and repaying – in USD – the amount lent;
Existing risk credit portfolio feasible to the market context or be legally prepared to establish a loan program;
Provide specific proposal to use Kiva’s credit to finance loans that have a high social or environmental impact and at reasonable interest rates.
Be capable of publishing at least $50,000 loans on Kiva’s website in first 12 months;
LIGADA BROKER ROLE
Ligada will support social institutions engaged with female economic empowerment in Mozambique to address Kiva's criteria and become eligible to be a field partner and receive
MAP !Approach and choose possible field partners based on their commitment to female economic empowermentand capability to meet Kiva’s criteria
SUPPORT !Provide field partner to be with support in elaborating Kiva's proposal and addressing the bureaucracy needed
KEEP TRACK Monitoring elected field partners on initial steps to guarantee delivery and best use of the credit line
Ligada is going to
THANK YOU!
For further information, please contact Iana Barenboim on [email protected] | Skype: ianabaren