Money world

World Vision is launching a microfinance site that allows donors to lend directly to small borrowers in developing nations.

The Federal Way, Wash.-based international charity has created World Vision Micro, a website that allows donors to give to entrepreneurs in developing nations who are seeking capital to start or expand their businesses.

The model is similar to Kiva.org, a San Francisco-based organization that connects individual lenders with individual borrowers. The microfinance industry actually uses several models, including Seattle’s Global Partnerships, which allocates investor or philanthropic capital to nonprofit lenders in developing nations that then distribute microloans or other financial services.

Under its new service, World Vision will approve applicants and pay their loans up front. Then the loan is posted on the website where donors can select it and pay for it; that money that is used to repay World Vision. Donors can search loans based on business type, gender of the borrower, location and size. Once the entrepreneur pays back the loan, the capital is recycled to pay for future loans.

World Vision already has a broad portfolio of microloans worth about $346 million, but the new site aims to enable individuals to make direct microloans. According to World Vision, the new microloan site has funded more than 850 loans worth a combined $230,000.

Source