MICROCAPITAL BRIEF: Invest Africa Launches Website Allowing Individuals to Loan $25 or More to Micro- and Small Enterprises in Benin, Ghana, South Africa

Invest Africa, a micro venture capital platform, recently launched a website to allow individuals to loan money to micro- and small-scale entrepreneurs in Africa. Invest Africa distributes the funds that it raises through three field partner microfinance institutions (MFIs): (1) Volunteer Partnerships for West Africa (VPWA), a Ghana-based nonprofit organization; (2) Alide, a Benin-based organization; and (3) Fiinco Africa Group, a nonprofit based in Mali. These field partners connect entrepreneurs with Invest Africa, which publishes entrepreneurs’ profiles for investors to see. Investors can loan a minimum of USD 25 to the entrepreneur of their choice through PayPal.com, an online money transfer site. When the entrepreneur repays the loan, the investor gets his or her money back plus an additional “social profit,” or a portion of the entrepreneur’s earnings. Investors can choose to withdraw the amount loaned, and the social profit may be used to disburse another loan or to purchase items from a “rewards program,” which includes electronics, event tickets and similar items. Invest Africa charges a ten percent fee on all funds received from investors to cover operational costs and transaction fees and an additional third party fee of three to five percent. These fees are included in the goal amount listed on each entrepreneur’s profile.

According to Invest Africa Founder Sandra Ntsonde, the organization is in the process of creating a linked nonprofit to develop a financial education program and allow the organization to be eligible for grants and tax-deductible donations. The location of the organization is not available.

By Charlotte Newman, Research Associate

About Invest Africa
Founded in 2011 and launched in 2012, Invest Africa is a micro venture capital platform formed as a for-profit benefit corporation. The organization has field partners in Ghana, Benin and Mali. Individuals can make loans of USD 25 or more to entrepreneurs of their choice. Once repayment begins lenders receive their original investment back plus a “social profit,” or portion of the entrepreneur’s earnings. The social profit can be reinvested or used to purchase rewards such as electronics or event tickets through the Invest Africa website.

Sources and Additional Resources

All Africa: “Invest Africa Launches the First Micro Credit Venture Capital Platform Dedicated to the African Continent – Interview with Founder, Sandra Ntsonde,” http://allafrica.com/stories/201206011332.html

Invest Africa: http://invest-africa.org

MicroCapital.org story, May 21, 2012, “MICROCAPITAL BRIEF: Kiva Boosts Funding Raised for Microfinance Loans by $18m to $89m in 2011,” https://www.microcapital.org/microcapital-brief-kiva-boosts-funding-raised-for-microfinance-loans-loans-by-18m-to-89m-in-2011/

MicroCapital.org story, April 10, 2012, “MICROCAPITAL BRIEF: Wokai Raises $873k for Microfinance Lending in Rural China,” https://www.microcapital.org/microcapital-brief-wokai-raises-873k-for-microfinance-lending-in-rural-china/

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

MicroCapital Universe Profile: Invest Africa
http://microcapital.org/microfinanceuniverse/tiki-index.php?page=Invest+Africa

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

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