What Is Micro Funding | Micro Funds Lending

What Is Micro Funding | Micro Funds Lending

micro funds

Micro funds

 

Micro funds are investment funds that focus on providing small amounts of capital to early-stage startup companies or entrepreneurs.

These funds typically invest in companies or entrepreneurs in their very early stages of development. Such as those that have just launched a Minimum Viable Product (MVP) or are developing their product or service.

Micro funds typically invest smaller amounts of capital than traditional venture capital firms, ranging from a range of dollars.

They may also have a shorter investment horizon and a more hands-on approach to working with their portfolio companies, providing mentorship, advice, networking opportunities, and financial support.

Micro funds can be a good option for startups. Only those that are too small or early-stage to attract funding from larger investors.

Kiva is a non-profit organization that aims to alleviate poverty by connecting people through lending.

The organization was founded in 2005 and resides in San Francisco, California. The name “Kiva” comes from the Swahili word that means “unity” or “agreement.”

Kiva operates a platform that allows individuals to lend money to entrepreneurs and small business owners in low-income countries worldwide.

Further, these loans usually go for agriculture, retail, and crafts businesses.

Kiva partners with local microfinance institutions in these countries to administer loans and support borrowers.

Kiva’s approach to lending is unique in that it allows individuals to lend small amounts of money. It could be as little as $25, to specific borrowers.

This approach is known as “crowdfunding” and allows many people to pool their resources to make a bigger impact.

Also, Kiva allows borrowers to post profiles and stories to help lenders connect with them on a personal level.

Since its founding, Kiva has facilitated over $2.5 billion in loans to more than 6 million borrowers in over 80 countries.

The organization has a repayment rate of over 97% and has received numerous awards and recognition for its innovative approach to poverty alleviation.

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It supports rural and underdeveloped communities globally on Kiva.org, a micro-funding foundation focusing on improving the livelihood of communities that can gradually sustain themselves.

“We are for the people and by the people” – A/X Publisher Digital 

You lend as little as $25 to a community that utilizes the funds to buy supplies for their startup cost.

Once they’ve made a profit or sales, Kiva returns the money to you. And you can either reloan, donate, or withdraw them.

Also, Kiva does not pay interest to lenders. Lending on Kiva involves the risk of principal loss, and loans should not be considered as a financial ROI rather an act of goodwill for the growth of poorer communities.

This is one of the many great ways to become a lender because when you believe and support the right people, their lives can improve in small to big ways.

“When we teach people to fish, they feed themselves for a lifetime” unknown. – quote is paraphrased for inclusive purposes.

micro funds

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