Client Profile - MicroCredit Enterprises
MicroCredit Enterprises (MCE) is a non-profit organization with a unique business model. They utilize the financial capital and good credit of high net worth individuals and institutions to guarantee microloans that lead to sustainable communities and social good throughout the developing world. Specifically, MCE borrows private capital from banks and foundations that is backed by guarantees from high net worth individuals and institutions. MCE then lends the borrowed money to microfinance institutions (MFIs) throughout the developing world that use it to issue microloans to poor entrepreneurs. MCE’s mission is to reduce poverty in the most impoverished countries by providing loans to finance cottage businesses.
Founded in 2005, MicroCredit Enterprises’ current loan portfolio includes 32 MFIs in 18 countries, impacting over 300,000 impoverished individuals. The first loan was issued in January 2006 and since then they have issued $46 million in loans in 22 countries. Their goal is to end this year with a total of $50 million lent since launching and their long-term goal is to raise $100 million in guarantees to support their lending.
As a MicroCredit Enterprises Management Fellow in 2004, Kyle R. Salyer, who now holds the position of Executive Vice President for Finance & Operations with MCE, co-researched and wrote an analysis of international lending to microfinance institutions and
microfinance capital market trends. Prior to his internship with MicroCredit Enterprises, he was a regional manager with the Mexican Association of Rural and Urban Transformation where he developed and managed their Chiapas-based microfinance institution. Mr. Salyer was responsible for creating savings and loan products, identifying new markets, managing the loan portfolio, and developing a strategic plan for program growth.
MCE is always looking for new sources of borrowing and new guarantors to sustain their growth plans. “Because of MCE’s high efficiency business model, we are able to keep our overhead at 3% to 4% of loans outstanding,” said Kyle. “Also, our borrowers have a near-perfect record of paying back their loans.” When vetting microfinance institutions, they heavily favor working with MFIs that have a focus on serving women in rural areas that live on less than $2/day. They are not providing hand-outs; rather, they promote financially struggling entrepreneurs to use their talents and skills that they already have. Over 80% of the entrepreneurs served by MCE are women. Although Kyle recently assumed his current role of working with RINA as MCE’s auditor, he is impressed with our understanding of their unusual model and the fact that Howard Zangwill, (their audit partner) went on a study-mission to Guatemala in 2008 to learn microfinance and visit microfinance institutions.
Category: Payday loans