| Questions related to: Microfinance 30 Dollar Finance 30$F Process Miscellaneous |
| Microfinance | |
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| What is Microfinance? | Microfinance is the extension of small loans to low-income people who do not qualify for traditional bank loans. It has been proven an effective tool in the ongoing struggle against poverty, by empowering the poor to better their financial situation through entrepreneurial activities. |
| Does it (Microfinance) work? | Microfinance has affected hundreds of millions of impoverished families worldwide and continues to help the destitute and hopeless. E.g. Grameen bank in Bangladesh has been able to alleviate poverty for more than 7 million women through the use of microcredit. |
| What is a Microfinance Institute (MFI)? | Microfinance Institutes (MFIs) are the entities who seek to provide micro credit to low income households and informal businesses. In India, these are NGOs, not-for-profit bank intermediaries and few commercial banks. |
| What is an Entrepreneur (or Local Entrepreneur or Borrower or MFI client or Beneficiary)? |
The term 'Entrepreneur' refers to the borrower or the end beneficiary who has an informal business plan, and he/she is willing to work towards it, but do not have access to formal banking sector because of lack of credit history and collateral. These are the clients of our partner MFIs.
Please note that Entrepreneur, Local Entrepreneur, Borrorwer or MFI client or Beneficiary refers to the same thing. |
| What is a Self Help Group (SHG)? | Self Help Group (SHG) is a village-based financial intermediary usually composed of between 10-15 local women. In India, SHG represents a way to get access to low-cost financial services with a process of self management and development for the women who are SHG members. SHGs are increasingly supported by NGOs and even Banks. | 30 Dollar Finance |
| Who are we? |
30 Dollar Finance is a project undertaken by 'SELF Educate' a US based non profit organization with a belief that technology is going to play a vital role in human development and we are set out to provide a platform that will help the needy achive their aspirations.
For more information on the management team, please click here: Team |
| What problem are we trying to address? |
Microfinance institutions in India have historically been heavily dependent on donor funding for financing both their portfolios and their operations. However, this is gradually changing and MFIs are relying more on stable source of income from commercial and nationalized banks.
For various reasons including sustainability and satisfying the funding entities, MFIs, especially medium (more than 5000 clients) to large (more than 25000 clients) focuses on:
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| Who are partner MFIs? | 30DF does not have enough infrastructure and local outreach to work on ground levels. So, we rely on our MFI partners to perform field operations such as funding transactions, guidance in business, training etc. | 30DF Process |
| How can you as an individual help? |
30DF system will host the profiles of many entrepreneurs (or working poor) with their business description along with the MFI they are a part of. You, as a social investor, follow these steps to get involved:
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| Who all can help? | Indians including NRIs can help. As a matter of fact, anybody in the world can be a part of 30DF. |
| Who is a social investor? | An individual who will use 30DF to invest money in entrepreneurs are called as social investors. |
| What is a repayment rate of an entrepreneur/beneficiary? | 30DF have devised a process of tracking the repayment history of an entrepreneur. We provide a percentage form of this tracked data called as repayment rate. |
| What is disbursement date for an entrepreneur/beneficiary? | This is the loan disbursement date. You can only invest in a beneficiary on or before the disbursement date. |
| What is a credit score of an entrepreneur? | 30DF have devised a evolutionary process of tracking the credit history of an entrepreneur. This process is based upon the repayment rate and other intangible factors. |
| How to reduce risk while investing? | Talking about risk, an entrepreneurs involvement in a Self Help Group (SHG) itself reduces the risk of default mainly due to the group ownership. Further, there are other assisting means like repayment rate records and credit score to decide upon an entrepreneur/beneficiary. |
| How can a social investor pay to an entrepreneur/beneficiary? |
There are following options for doing this:
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| Is your money safe? |
One should not mistake 30DF to be a profit making system, but should see it as a means to help working ultra or medium poor.
That said, most of the entrepreneurs are a part of SHGs which makes it a low risk investment. Usually, the SHG model makes sure that the defaulter can be rescued by using their own savings. The repayment rate for our partner MFIs is high (e.g. SPMBT's repayment rate is 98.5%) even compared to a commercial bank. If in case, beneficiary is not able to pay back, there wont be any harsh recovery mechanism. But the group (of which B is a part of) will experience higher interest rate or even denial the next time they approach our partner MFI for loan/s. |
| What is the role of partner MFI? |
Partner MFI works on-field. They filter the profiles; subsequently monitors, tracks and does accounting of loans.
When a group of women decides to form a SHG, they undergo training for a period of 6 months monitored and taught by partner MFI's staff. They learn SHG concept, involved accounting and appraisal process as a part of this training. Partner MFI monitors the change and group's understanding of the process, and once assured they mark the SHG as a capable one and ready to receive loans. |
| End beneficiary pays around 11-13% rate of interest. How? |
Beneficiary needs to cover for
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| How does 30$F monitor if the loan is being used for the purpose it is taken for? |
The monitoring, tracking and accounting is done by our partner MFIs.
The monitoring happens at each level of the hierarchy starting from individuals, then SHG, village and district level. Field executives of our partner MFIs takes part in the monthly meeting of SHG to ensures that loans are being used for the purpose it is taken for. |
Miscellaneous |
| Why do I see SELF's (Self Educate and Learning Foundation) name on Paypal gateway instead of 30DF? | 30 Dollar Finance's is a project undertaken by SELF (Self Educate and Learning Foundation). 30DF's operating body is independent of the current work SELF is doing. 30DF is obliged to use SELF's paypal account for all monetary transactions. |