I thank Bhalchander Vishwanath, the founder and CEO of United Prosperity, and Tavishi Agarwal, an intern at this microloan guaranteeing website, for sharing this post.
Have you ever wondered, “How can I help someone who needs a little help to achieve financial independence without burning a big hole in my pocket, and that too in a sustainable manner?” If you have, this post is for you.
How United Prosperity Works
With as little as $25, you can do a lot: help a poor family, empower women, alleviate poverty and help build communities around the world. Your $25 can make nearly $50 in available microloans to a poor family. Upon loan repayment (12 to 18 months) you can recycle your funds to support another entrepreneur, or withdraw the amount.
By virtue of this, UnitedProsperity.org is the world’s first microloan guaranteeing website.
A Successful Client Story
Since launch last summer, United Prosperity has had a great impact. For instance, Farida, a micro entrepreneur, used to school uniforms while her daughter stayed home, instead of going to school, to assist her. Farida’s profile, along with the profiles of five of her co-borrowers, was uploaded on our website and soon, twelve individuals contributed towards her guarantee. These individuals, who came from all over the world, are referred to as ‘social guarantors’. As a result, Farida received a microloan of $175, which was enough money to buy two sewing machines, hire workers and send her daughter to school.
How Does Your $25 Guarantee Create a $50 Loan?
Your $25 serves as collateral or guarantee with a local bank, which makes a microloan nearly twice as large to our microfinance partners who work with micro entrepreneurs, such as Farida. Here are the steps:
The background: The microfinance partner uploads the profile of micro entrepreneurs after screening them, and typically disburses the microloan from their working capital so the micro entrepreneur can start his/her business as soon as possible.
- You browse the profiles of the entrepreneurs on United Prosperity’s website and choose whom you would like to support (through your microloan guarantee). You may pay through PayPal or a credit card.
- United Prosperity consolidates the guarantees on multiple microloans for the microfinance partner and issues a guarantee to the bank, which requires the depositing of your funds as collateral with the bank.
- Based on United Prosperity’s guarantee, the bank issues a microloan that is greater than the total guarantee amount. If the microloan to the entrepreneur is already disbursed, then the microfinance institution replenishes its working capital, otherwise the loan is passed on to the entrepreneur.
- The micro entrepreneurs use the microloan to grow or start their businesses and gradually start repaying them. Repayment statistics and progress updates are available to you through postings on the micro entrepreneur’s profile on our website and through RSS feeds.
- Once the entire micro loan is repaid to the bank, United Prosperity’s guarantee to the bank gets freed up, and you can choose to support another micro entrepreneur or withdraw the amount from the system.
Some Figures
With the generous support of people like you and me, United Prosperity has already made $130,000 in microloans available to more than 650 micro entrepreneurs since its launch last summer.
Even better, Ajiwika our first microfinance partner has built a credit history with the local bank and has earned the trust of the local banking community. After United Prosperity started supporting Ajiwka, four other banks in India have issued loans to this microfinance institutions, thus helping many more poor entrepreneurs, their families and their local communities progress towards financial freedom and, eventually, out of poverty.
I hope you will join me and many others in supporting poor families become self- sufficient one microloan guarantee at a time.
Bhalchander Vishwanath
Founder and CEO – UnitedProsperity.org
