Author: Kanini Mutooni

Changing the World Through Crowdfunding

Kanini Mutooni

Although women play a major role in the economic development of emerging economies, they have the least access to capital and credit compared to their male counterparts. Giving more credit to women has been mooted as one of the fastest ways to reduce poverty in emerging economies. The virtues of female entrepreneurship have been extolled over the last few years although a lot still needs to be done to make this a reality: without capital or credit entrepreneurship is hardly possible so this means that solutions need to be found that enhance this capacity rather than talk about it and do nothing about it.

Crowd funding is definitely one of the solutions that could be put forward that could increase the likelihood of increasing available capital to women. Crowd funding in this sense refers to the process of providing small loans to female owned businesses which enables them to expand and grow their businesses. This also means that they reinvest the proceeds of their business into the nutrition and education of their families which results in an increase in the quality of life of their society and community. This correlation has been supported by evidence from the World Bank and IFC stating that women reinvest 90% of their profits in the home whilst mean reinvest only 60-70%. Continue reading →

P2P Start-ups: Finding an Opportunity in the Midst of a Lingering Recession

Kanini Mutooni 3 Comments

The global recession or what has come to be known as the ‘great recession’ –in direct reference to the 1930s era Great Depression-has been with us unbelievably for the last 3 and a half years. It doesn’t seem like it does it? Many had predicted that it would turn out to be a ‘W’ or maybe a ‘U shaped or even a ‘double dip’ recovery by now, with most commentators assuming that we would most likely have seen its tail end with a year or two. Most- if not all of them- have been proved embarrassingly wrong! Countries such as the UK, US, Spain, Ireland, Hungary, Portugal –the list goes one and on and on and on- are still counting the cost of the recession in terms of lost jobs, productivity and in some cases, sovereign default! Recovery it seems, whatever alphabet sounds sexy, W or U shaped –is still yet to be seen in many cases.

Looking at the effects of the recession from the microfinance industry perspective however is what makes very interesting reading. Microfinance as such, is an industry that is curiously not correlated directly to the mainstream financial markets. Continue reading →

The Rise and Rise of the European Micro Lending Internet Platform Market

Kanini Mutooni 1 Comment

Is there enough space for all of us and just how easy is it to set up shop?

In a span of just under 3 years, 3 new micro credit platforms have taken shape in the European micro lending P2P context:  MyC4, Babyloan and the soon to be launched myAzimia.org (Azimia means to borrow and lend in swahili). These platforms are all aligned to a specific domestic market thanks to the way such businesses are regulated in Europe ; Myc4 is based in Denmark, Babyloan in France and myAzimia in the UK.

These are platforms all with varying business and revenue models but all with one key objective; to channel the capital of private and institutional investors in Europe to small businesses based in a emerging economies in sub saharan Africa and Asia. In achieving this objective, these young businesses get a life line of capital that they badly need, finally get an opportunity to enter the formal financial sector and the economic and social fabric of the countries that they operate in are significantly improved and ultimately the quality of life of these individuals is upgraded. I don’t need to to reinvent the wheel here, we all know about the fantastic tool that microfinance can be in helping to alleviate poverty and helping to improve lives, but the innovative element of these platforms takes microfinance as a financial tool to a new level as it uses the internet as a linkage between the entrepreneurs in developing economies and social investors in Europe.

As I mentioned already the business models of these platforms are all different, and one platform in particular has suffered significant reputational damage within the last 6 months as a result of selecting MFI partner institutions in Africa, that for one reason or another, turned out completely unable to deliver what they had promised. This is a challenge that any platform of this nature faces, the questions that need to be thoroughly explored before selecting partner institutions responsible for loan selection and assessment are:

1. who are the partners in the developing country?

2. Are they regulated locally?

3. Do they understand our process?

4.Do they already have a quality loan book?

5.Do they have high standards in their credit approval procedure?

6. Do they understand the local market and how it operates?

7. Do they have a good track record?

The identification and marketing to social investors is also an important aspect but to my mind has been highly overrated by some commentators. My motto is, get the right partners to work with, understand the market that you plan to disburse loans in and everything else will follow. Continue reading →