Your investment in Vision Microfinance enables the provision of small loans to poor people via carefully selected microfinance institutions. Microfinance institutions are mainly present in developing countries and vary in size and scope. They often start up as non-government organizations (NGOs) which concentrate merely on loans and later turn into regular banks which offer all common financial services.
The lack of „traditional“ collateral of micro entrepreneurs is compensated by a thorough check of the personal living circumstances and a close contact between the microfinance institution and the micro entrepreneur. Microfinance institutions know their clients intimately, they meet regularly and help and advise them.
Often microfinance institutions give loans to small groups of people who are jointly liable for the timely payment of the debt. The social network is often very strong in developing countries; it ensures that everybody wants to pay back the loan to save face. The payback ratio of micro entrepreneurs to microfinance institutions is an impressive 95-98%.