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Building a Sustainable Micro-finance Business

In the less developed parts of the world many women, and it is mostly women, start up their own business through investments made via some micro-financing.  Micro-financing is a source of financial services for entrepreneurs and small businesses lacking access to banking and related services. The two primary mechanisms for the delivery of financial services to such clients are:

  • relationship-based banking for individual entrepreneurs and small businesses; and
  • group-based models, where several entrepreneurs come together to apply for loans and other services as a group.

The World Economic Forum (WEF) and others are great advocates of micro-financing through the second model to help individuals lift themselves and their families out of poverty.  In a recent article published in the WEF, there is some great advice regarding setting up a micro-financing service.  So what are the fundamental principles for building a successful, sustainable micro-franchise business model?

  • Start with a socially minded entrepreneur
  • Design for a market
  • Build a brand – having a micro-finance business is the same as any other business
  • Simplicity is key
  • Support, support, support your customers

If you ever thought about setting up your micro-financing scheme – this article is a good place to start.

Comments by Mary Sue Rogers

Posted On : 27-09-16

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