Ever since Muhammad Yunus developed the concepts of microfinance and micro-credit, people around the world have been scrambling to put together programs that are committed putting Yunus’ principles in place. That is, arming entrepreneurs (namely in developing countries) with small loans so that they can lift themselves, their families and their communities out of poverty by accessing capital needed for their businesses. Although their has been controversy over the validity of microfinance (critics say that it is too difficult to weigh the financial and social good equally. As an example read more about the microfinance crisis in Andhra Pradesh here. More interestingly, an entire group of organizations has emerged to aid such entrepreneurs who have already received micro loans. Their goal? To help social entrepreneurs continue to further build their businesses by offering them a variety of tools and mechanisms in which they can grow beyond the early stages.
One such organization is InVenture. InVenture was started in 2010 by Shivani Siroya. Siroya earned her BA in International Studies from Wesleyan University, and an M.P.H in Health and Economics Policy from Columbia University. Siroya was only 28 years old when she started InVenture. Inspired by the good that she saw that could come from microfinance in India and Africa, Siroya realized that her passion lay in helping already established entrepreneurs. InVenture seeks to leverage mobile technology to create credit scores for unbanked individuals around the world. It works like this: the organization uses InSight, a simple accounting tool that works by SMS on any phone, no Internet or downloading is required. Individuals track daily expenses and revenue on their phones so that they can better manage their businesses. The creditworthiness of potential borrowers is then assessed on unconventional credit performance metrics, and individuals are given access to capital. In essence, InVenture helps “individuals qualify for and access affordable financial services tailored to their needs.” InVenture doesn’t give the loans, it seeks to make borrowers creditworthy so that they can be eligible for loans from lending companies. Overtime borrowers get better loan terms. Entrepreneurs also receive business development assistance to help formulate strategy and set viable targets for financial growth. Proof that their model is working? In 2010 InVenture operated three pilot funds in Mali, Ghana, and India, and all 36 entrepreneurs had created jobs within their communities. Additionally, each business paid back its principal investment and met returns of 15% or higher. They also reinvested 5% of their revenue into social initiatives in their communities. In total these businesses positively impacted their local communities by providing reproductive health services to 100 women in Mali, tuition for three young girls in Ghana, and vocational training for 20 women in India.
Learn more about InVenture at their website: www.inventure.org