Belmont University

Taking Microfinace to a New Level

There is a relatively new organization trying to take microfinancing to a new level, while also making microfinance a sustainable and profitable business model.

Here is their model as described on their website:

Our mission is to fight global poverty by increasing access to microfinance.

Unitus envisions a world where microfinance is available to every individual. We work toward this vision by accelerating the growth of the world's highest-potential emerging microfinance institutions. We provide capital investments and capacity-building consulting, thus empowering these organizations to scale and provide life-changing financial services to dramatically more of the world's working poor.....

Unitus acts as a social venture capital investor for the microfinance industry. The organization identifies the highest-potential microfinance institutions (MFIs) in developing countries and helps accelerate their growth through capital investments and capacity-building consulting, thus empowering them to help dramatically more poor people worldwide.

In 2006 and 2007 Unitus received the Fast Company/Monitor Group Social Capitalist Award for their work in building microfinance in India and around the globe.

Entrepreneurship is not just a model for building wealth. It is a model that can, through free enterprise and business ownership, help transform the world in ways that models based on wealth redistribution and government dependency can never accomplish.

(Thanks to Ben Cunningham for recommending this post).


Posted by Jeff Cornwall on April 23, 2007 05:06 AM |

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Comments

Hi,

Thanks for all the details.

Birdied by: Alexandra | April 23, 2007 11:10 AM

Kiva (www.kiva.org/) is another great microfinance org. They work a bit differently in that you can provide part of a loan to an individual, a la Prosper, and read about how the venture proceeds. Regardless, they are both very cool orgs and, as you say, they are helping to facilitate transformative entrepreneurship in the developing world.

Birdied by: Tom Powell | April 23, 2007 02:49 PM

Thank you for the post about Unitus, Jeff. I previously worked with them and continue to support their efforts -- is an amazing group of people applying a very capitalist-oriented approach to a social problem, to drive bottoms-up solutions (how's that for a few buzzwords!).

Birdied by: Dave Schappell | April 25, 2007 09:36 AM

Thank you for posting on this topic. This is an issue that is very dear to my heart, and I am glad to see it getting more attention. As a volunteer at World Relief, a local refugee resettlement organization, I am so happy to see when people from underdeveloped countries recognize their potential as an entrepreneur and make an effort to better themselves...particularly women who are often shunned by famiiy, friends, and even their own husbands, for taking a step to be entrepreneurs. Much praise to Unitus and similar companies for making this possible.

Birdied by: chelsea | April 26, 2007 11:53 AM

Thanks for helping explain our model Jeff. In case you wanted a few more buzz words to add to Dave's comment above (btw, thanks Dave!), here's some additional info for your readers about our strategy for building effective social enterprises:

Our staff are experts at unlocking growth. Instead of taking $5 and passing it on as a $5 microloan, Unitus takes this funding and invests it in strengthening our microfinance partners; we help them remove barriers to growth, improve efficiency, and raise additional capital through outside sources.

We believe that more efficient organizations with more capital results in more loans for more of the world's working poor.

Ultimately, we believe that this model unleashes the tremendous potential of the human spirit and gives opportunity for hardworking men and women to work their way out of poverty.

We operate with the urgent understanding that only 20% of those who need access to microfinance currently have access to it. After 30 years of industry growth, this simply is not enough. By dramatically expanding microfinance institutions as sustainable and high-quality businesses, we believe that we can help close this gap between the "have's" and the "have not's" faster than ever before.

Birdied by: Katie Gruver | April 26, 2007 12:01 PM

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