benchmark concept of microcredit

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since there seems to be a lot of confusion, let's state the core model of microcredit; if anyone is sure that the original model had differences from the following please tell me and I will add in your signed comments

yes I have rounded a few numbers

microcredit offers $100 loan with 50 weekly payback installments interest rate is 20% flat

so each weekly installemt cost $2.43

the 3 cents comes from recommending that you buy 1 share in the microcredit bank whose price si $1.50

who is offered this loan:

poor women or poor community builders for the sole purpose of developing income generating activity (ie a small sustaianble business)

what else:

you get help from a peer circle of 5

in fact most villages are so local that you will see many peer circles helping each other; moreover the branch manager is 100% incentivised not to loan you unless you are ready; moreover parallel branch managers know roungly what number of franchises of each kind are sustainable in each village so you won't be encouraged to go into a business where there is too much supply

there is a very strict rule - no gifts to be given to banking staff; this is part of the culture of ensuring that the granting of loans is transparent, open , equitable

as well as borrowers, the local community is encouraged to take out savings accounts- a branch is only given a full cretification when it has achieved several goals: firstly self-sustainability of the local branch ie more communal savings coming in than going out; second since the purpose of the bank is to take both individuals out of poverty and to develop sustainability of the community they live in - members agree to a set of club rules- in grameen's case these included our branch is not certified as fully operational until every child of a member family goes to school

the microcredit bank is entirely owned by its borrowers, and since new borrowers must come from the poorest parts of the community valuetrue sustainability investment mapmaking professions can certify this is wholly assured as a social business - one where the organisational system -its compound future flows and value multipliers - are coordinated with shareholders who are 100% aligned with the long-term system purpose - to end poverty

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