United Prosperity (organisation)
United Prosperity is a not-for-profit Web-based microcredit organisation.[1]
Unlike most microcredit or person-to-person lending organisations, United Prosperity does not directly lend to the micro-entrepreneur, but instead the micro-loans are used to provide a guarantee to a local bank, which lends to the micro-entrepreneur. Typically the local bank will lend about twice the amount provided by the micro-lender's guarantee, thus providing greater leverage than traditional micro-credit.[2]
Another claimed benefit of this approach is that the micro-entrepreneur develops a relationship and, most importantly, a credit history with their local bank, enabling the micro-entrepreneur to become independent of the micro-lenders in the long term.[3] A criticism of traditional microcredit models is that they can create a long-term dependency between the micro-lenders and the micro-entrepreneur as the micro-entrepreneur never builds a relationship with local banks.[4]
Notes
- ↑ Computer World, How technology built the microfinance industry, 9 March 2009, accessed 28 October 2009
- ↑ The Daily Tell, Nonprofit Uses Social Guarantors to Support Strugging Entrepreneurs, 27 August 2009, accessed 25 October 2009
- ↑ @alliance, World’s first person-to-person loan guarantee website enters the field, 22 June 2009, accessed 28 October 2009
- ↑ Jason Meade, An Examination of the Microcredit Movement, accessed 28 October 2009
