MICROCAPITAL BRIEF: InVenture Offers Expansion Capital to Support Small Enterprises in their Graduating from Microfinance to Traditional Banking

InVenture, a US-based microfinance service focused on investing in small enterprises in poor countries, recently announced a revised operations model and a “peer-to-peer” fundraising website. A recent investment of undisclosed source and amount supports InVenture’s new model that is intended to generate cost savings by separating the online platform administration from portfolio management functions. CEO and Founder Shivani Siroya said, “By privatizing portions of our operations, we have been able to cut down overhead and better leverage the resources at our disposal for the benefit of our micro-entrepreneurs.”

In its first year, InVenture has disbursed loans of USD 1,000 to USD 10,000 to 36 business owners, who have two years to pay back their loans, with interest based on a percentage of monthly gross revenue. Reporting is performed on a daily basis via SMS (text message), allowing for the automated creation of an income statement that is intended to help the entrepreneurs secure future financing from mainstream banks.

The new website allows users – termed “InVestors” – to remit “InVestments” of USD 25 or more to support microentrepreneurs. Ms Siroya added, “For online InVestors, the new profile functions will make it possible to track the progress of their InVestments, create Rallies around favorite micro-entrepreneurs and causes, and experience life on the InVenture team from the writing of business development advisors in Mexico, Mali and India.” Upon repayment, users may withdraw their principal, but they may not cash out the interest.

By Carol Kim, Research Associate

About InVenture: InVenture is a US-based microfinance service focused on providing investments to microenterprises needing larger investments than can be obtained from microlenders. InVenture supports underserved communities in India, Mali and Mexico through a hybrid model that includes inVenture Capital Corporation (ICC), a certified B Corporation (pending) that provides expansion capital and tracks the financial progress, and the InVenture Foundation, a nonprofit that provides educational training and on-the-ground advisory support to microentrepreneurs through its fellowship program. In 2011, InVenture reported to MicroCapital that it disbursed 36 loans ranging in size from USD 1,000 to USD 10,000 during its first year of operation.

Sources and Additional Resources:

Interview with Shivani Siroya: August 3, 2011

PRWeb: “InVenture Announces New Initiatives to Revolutionize Peer-to-Peer Support of Growing Micro-Entrepreneurs Worldwide”, http://www.prweb.com/releases/prweb2011/6/prweb8578145.htm

MicroCapital.org: “MICROCAPITAL BRIEF: 17 Websites Now Allow Individuals to Commit as Little as USD 20 as Microfinance Loans”, May 5, 2011, https://www.microcapital.org/microcapital-brief-17-websites-now-allow-individuals-to-commit-as-little-as-usd-20-as-microfinance-loans/

MicroCapital’s Universe Profile: InVenture, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=InVenture

Browse the MicroCapital Universe and add your entry to the wiki at https://www.microcapital.org/microfinanceuniverse/

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