Peer-to-peer lenders like Zopa, Funding Circle and RateSetter are catching on because of the interest rates on offer.
(Just bear in mind, always, that there's no deposit protection as you get with banks.)
But Chris Shearlock from the Co-op has reminded me that the peer-to-peer model is also working to support people who are starting businesses in the developing world.
Lend With Care has managed to make 25,000 loans in its first year, helping entrepreneurs in Africa, East Asia and Eastern Europe with small loans.
You're not going to be taking part in this to make profits, but you can hope to get your money back while creating livelihoods and jobs.
There are others providing micro-loans, a fantastic charity near me, for instance, called Microloan Foundation, but the Lend With Care idea connects lenders directly with borrowers.
Please tell me about other comparable organisations which are doing this - it's worth giving them some publicity.
Showing posts with label microloan. Show all posts
Showing posts with label microloan. Show all posts
Saturday, 9 June 2012
Monday, 24 October 2011
Take care with microloans...
What do you think when you hear the term "microloan"?
For me it conjures up the world of the barefoot banker and Grameen Bank, which pioneered the business of providing small loans to the rural poor in Bangladesh.
Grameen and its founder, Muhammad Yunus, were awarded the Nobel Peace Prize.
So it was surprising to see a high cost loan company, Ferratum, marketing itself in the UK as a provider of microloans.
Ferratum lends out cash at an APR of 3113%, by no means the highest rate among payday loan companies, but pretty high.
"Microloan" sounds nicer than "payday loan", doesn't it, like they're so helpful? But, clearly, you need to be on your guard.
To mark this discovery, here are three providers of microloans.
1. The Microloan Foundation.
London-based charity which provides small loans, averaging £65, in Malawi and more recently Zambia, to help people start businesses and feed their families.
If you borrowed £100 from them for 4 months, you'd pay back £120.
2. Fair Finance
A social business, offering microloans to people and small businesses in Hackney.
If you took out a £750 personal loan, you would pay back £1007 after 18 months.
They say the APR is 48%.
3. Ferratum
Payday loan firm from Finland, opened in the UK 4 months ago.
"Microloans" are repayable between 7 and 45 days. First time customers are limited to £100.
£100 costs £5 a week or £33 for a month.
But annually that works at the APR of 3113%.
I know which ones I prefer...
For me it conjures up the world of the barefoot banker and Grameen Bank, which pioneered the business of providing small loans to the rural poor in Bangladesh.
Grameen and its founder, Muhammad Yunus, were awarded the Nobel Peace Prize.
So it was surprising to see a high cost loan company, Ferratum, marketing itself in the UK as a provider of microloans.
Ferratum lends out cash at an APR of 3113%, by no means the highest rate among payday loan companies, but pretty high.
"Microloan" sounds nicer than "payday loan", doesn't it, like they're so helpful? But, clearly, you need to be on your guard.
To mark this discovery, here are three providers of microloans.
1. The Microloan Foundation.
London-based charity which provides small loans, averaging £65, in Malawi and more recently Zambia, to help people start businesses and feed their families.
If you borrowed £100 from them for 4 months, you'd pay back £120.
2. Fair Finance
A social business, offering microloans to people and small businesses in Hackney.
If you took out a £750 personal loan, you would pay back £1007 after 18 months.
They say the APR is 48%.
3. Ferratum
Payday loan firm from Finland, opened in the UK 4 months ago.
"Microloans" are repayable between 7 and 45 days. First time customers are limited to £100.
£100 costs £5 a week or £33 for a month.
But annually that works at the APR of 3113%.
I know which ones I prefer...
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