:Title:    benchmark concept of microcredit
:Author:   chris macrae
:Date:     Tue, 20 May 2008 09:31:05 PDT
:Modified: Tue, 20 May 2008 10:16:08 PDT
:URL:      http://www.ned.com/group/microfinance/news/6/

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 <font size=1>Search | <a href="http://www.google.com/search?hl=en&safe=off&q=%2Byunus%20OR%20grameen%20%2Btelecentre%20OR%20solutions%20OR%20telecenter%20%2Bgates%20OR%20intel%20OR%20cisco%20%20OR%20schmidt%20OR%20google&um=1&ie=UTF-8&sa=N&tab=nw">all</a> | <a href="http://news.google.com/news?hl=en&safe=off&q=%2Byunus%20OR%20grameen%20%2Btelecentre%20OR%20solutions%20OR%20telecenter%20%2Bgates%20OR%20intel%20OR%20cisco%20%20OR%20schmidt%20OR%20google&um=1&ie=UTF-8&sa=N&tab=wn">news</a>|  west coast internet explorers extending social business model pioneered by microcredit</font><hr>
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

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 the microcredit bank is entirely owned by its borrowers, and since new borrowers must come from the poorest parts of the community <a href="http://www.microcredit.tv/id34.html">valuetrue sustainability investment mapmaking professions</a> 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