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Page 20

Microlending 3 – Who Are the Borrowers?

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Continuing from the last post, I mentioned that most of the borrowers in this lending model are street vendors.Why do they become street vendors? Ruddy explained something interesting: the majority of their borrowers are business women who lead their household. Numerous studies have shown that when women participate in economic activities, the chances of lifting a household out of poverty are significantly higher. When the women in a household begin to improve their financial situation, the entire family tends to make progress in both economic stability and education. This benefits not only the women themselves but also their families and communities.... Continue reading

Microlending 2 – Where Are They Lending?

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To put it simply, this microloan company operates in Kenya. Each loan ranges from $30 to $50, and the borrowing term is only 30 days! Reportedly, they receive nearly 8 million applications per month, but only approve around 1 million new borrowers monthly due to capital constraint. So far, they’ve been able to lend out about $55 million each month.When I heard “Kenya,” my first reaction was: Is lending in Africa even safe?That’s where understanding the mechanism of microloans in Africa becomes important.The person I spoke with, Ruddy, started out as a lender himself. After making money in the space... Continue reading

Microlending 1 – The Beginning

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I know that micro loans can be highly profitable because, in real life, I personally know a few people who are involved in this asset class. They specialize in consumer loans, lending small amounts to a large number of people. The default rate is actually very low, and the profit margins are insanely high—so high that if someone told you about it, your first reaction might be to think it’s a scam.Naturally, opportunities like this are typically closed off to outsiders. Since they’re so lucrative, there’s no need to advertise or invite others in. It’s usually a private game played... Continue reading

(8) – Finale – Past Track Record and How to Participate?

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Continuing from the last post, Reza said that the first startup wasn’t considered a success, as it didn’t meet the initial expectations. They originally thought they could deliver 3-10x returns to early investors, but that didn’t happen, and in the end, they returned the principal back to them, or converted their shares into this new startup if investors indicated interest. Some of his peers who dropped out of Harvard at the same time already built unicorns, and he felt really frustrated during that period. However, if it weren’t for that experience, they wouldn’t have found the market pain points and... Continue reading

(7) – How to Scale?

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Continuing from the last post, after explaining the three viable revenue streams, Reza began talking about their scaling strategy.He explained that their expansion approach mirrors that of property management companies: it’s all about adding doors—bringing more units under management.For property management companies, growth means consistently signing contracts with small to mid-sized landlords, often adding 10 to 50 units at a time. Similarly, their strategy focuses on signing small to mid-sized property management companies. “Every new client we bring onboard adds 500 to 1,500 doors to our platform. This creates an incredibly fast scaling effect,” Reza said.How They Reach ClientsCurious, I... Continue reading

Showing 96–100 of 182 posts