Microfinance

The French bluesman Bill Deraime had it all wrong. Contrary to what he said in his single tube in 1981, Babylon not kidding at all. The first European microcredit site Babyloan, is what is more serious. In just one year of existence, the “social business” in French has become a reference. Nicknamed “babyloaners” and from 100 nationalities, its 5,400 members have already paid 560,000 euros and funded over 2000 projects in seven countries including Vietnam, Cambodia, Tajikistan and the Philippines.

Originally Babyloan ago a banker all he was most classic that, thanks to the Internet, found a way to raise and lend money otherwise. “And effectively,” he says. Former Merrill Lynch and ABN Amro, Arnaud Fishmonger chooses to 40 years alternative finance the fight against poverty. It is based on the American microfinance site Kiva (over 600,000 lenders and 275,000 funded projects for 109 million – EUR 78 million) it develops Babyloanian in fall 2008. A Community model in which the lender chooses “catalog” the recipient of the loan. First, picture, city, activity (mainly livestock, trade or crafts), the file is well documented. The visitor then to decide whether to bet a few euros on the draft Kodjo, who wants to expand his shop in Cotonou, Benin. “The average amount of projects amounts to 288 euros for an average of eight months,” said Arnaud Fishmonger. The minimum loan is 20 euros but the average amount is around 55 euros. If babyloaners receive no interest, they do not recover unless their bets on the maturity of projects. They can then either withdraw their money or finance other projects. “The exit rate is very low, around 2% now,” says Arnaud Fishmonger, which aims to attract 100,000 members within three years.

As Kiva overseas Babyloan relies on local microfinance institutions (MFIs) to choose the sixty currently available to users projects. Institutes which are responsible for coaching entrepreneurs on the ground and guarantee money loaned. In case of default of beneficiaries – from 1.5 to 5% depending on Fishmonger, citing the figure of 6% for a credit institution as Cetelem – it is they who pay the lenders. These credits cost 20 to 40% interest for borrowers due to inflation in emerging refinancing costs and MFI operating. “It can seem overwhelming, recognizes the founder of Babyloan, but this is little compared to the rates charged by local moneylenders, up 300%. Local banks who refuse to pay are also slightly less expensive, with rates running at around 25%. “The site, which recently received a license to operate in Italy, laments not being able, in the state current French law, distribute microloans in France. “The Bank of France, which has supported us a lot, took four months to say yes to finance North-South relations and two hours to say no to the NNE credits, concludes Arnaud Fishmonger. It’s absurd but the Monetary and Financial Code is such that it is impossible to finance projects in France. “A brake that only a microfinance law might raise.

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