The aggregate revenue of the 50 million richest people in the world (about 1% of the world population), is much more than that of the 3 billion of the world's poorest (57% of the population).
The loan amount varies from a few Euros to several thousand Euros. It varies according to the country, and the activities generated. Consult the heading "Field testimonials" for some examples.
Are the loans really repaid ?
Repayment rates are often very high, for example in Morocco in 2004 a repayment rate of 100% was observed in the 5 biggest MFIs. The rates vary according to the institutions and the countries, but it is not rare for the most well established institutions to exceed 98%.
Does the life of the beneficiaries really improve ?
Beneficiaries profit at several levels from the loan granted to them. On the one hand, the launching of a new activity permits them to improve their material conditions of life: to eat better, to take care of themselves, to equip themselves. On the other hand, the fact of living better by their own means is often an important source of personal satisfaction.
What are the maximum rates of interest used on those who benefit from microcredit ?
It is important to recall that those who benefit from microcredit (in general those living below the poverty line) are those who do not have access to financing from commercial banks for they do not have the required guarantees. We distinguish between three types of interest rate: interest rates used by Microfinance Institutions (MFIs) which lies between the basic bank rate and the attrition rate and varies according to the country. In India, MFIs use a yearly rate of 17% while banks go in for 13% and some money lenders, 360% yearly (with an inflation rate of 5% in 2003 -source: Cofacerating). In Morocco, MFIs go in for a rate of 2 to 3% per month while money lenders go in for 10 to 20 % monthly and commercial banks charge 12% yearly (inflation rate of 1.6% -source: Cofacerating). In West Africa, it is observed that MFIs go in for an interest rate of nearly 27% to 30% per year, the bank rate varying from 17 to 25% and money lenders go in for a rate of nearly 20% per month!! Thus, though the interest rate of MFIs seems high a priori, it is often well within the means of the beneficiaries. Several impact studies undertaken by PlaNet Finance have shown that clients are much more interested in the efficiency of the institution which grants credit to them or by the loan amounts than by the interest rate. Lastly, it is important to stress that if the interest rates of MFIs are often higher than the bank rate it is merely to cover microcredit management costs which are much higher than the management costs of classical banking. To learn more about this subject, consult the following sites: - the CGAP site - the microfinancegateway site and you can make a search by typing "interest rate".
The PlaNet Finance association
What is the status of the local offices of PlaNet Finance ?
PlaNet Finance is made up of a network of non-profit organizations. These organizations share the following common characteristics :
- They are all non-profit associations of local authorities: the Civil Association in Mexico, the Oscip in Brazil, the 501C3 in the United States, Charity in India etc.
- They all share the same mission and the same Code of Ethics (Please refer to The Statutes and the Code of Ethics of PlaNet Finance)
They all sign an affiliation contract with PlaNet Finance which guarantees their respect for the mission and the common code.
Do you have any local authority associations ? How legitimate is your international network besides the offices ?
PlaNet Finance only works in partnership with local authority associations. PlaNet Finance Paris, like all PlaNet Finance associations in the network, has strong partnerships with local associations. There are three types of partnerships :
- Partnerships with national Microfinance networks. In Benin, PlaNet Finance works in partnership with the ALAFIA network which is a collection of more than 30 MFIs in Benin; in Togo, PlaNet Finance works in partnership with two local networks (APMFIST, and ALAFIA); in Morocco, PlaNet Finance works in partnership with FNAM ; in China, PlaNet Finance helps to establish the CAM, a Chinese Microfinance network, etc..
Moreover, these partnerships extend themselves outside the countries where PlaNet Finance has affiliated associations. In fact, PlaNet Finance also has a partnership with the Mongolian Microfinance network which we support the creation, with the AFMIN (The African Microfinance network, based in the Ivory Coast), with REGUIPRAM, in Guinea, etc, etc.
- PlaNet Finance is a direct partner for the development of Microfinance Institutions. For example, in Morocco, PlaNet Finance works directly by providing training and technical support to the 11 MFIs of the country with which partnership agreements exist. In Mexico, PlaNet Finance works with more than 50 MFIs with which partnership agreements also exist. These partnerships are formed not only in all the countries in which PlaNet Finance has affiliated associations, but also in countries where we are not permanently present. For example, PlaNet Finance supports a Microfinance institution in Ivory Coast with which a partnership exists (CICA), another in Cameroon, and a dozen of institutions in Guinea.
- In some cases, collaboration or partnership agreements are made with local authority associations which are not Microfinance Institutions. This is the case especially in West Africa where PlaNet Finance, in the framework of a Microfinance and Health programme and a development portal programme, has defined partnerships with local authority associations in the field of health, education, etc.
What is PlaNet Finance's existence as an association ?
1- PlaNet Finance's association life works as follows:
As specified by the statutes of the association, the General Assembly of PlaNet Finance today brings together 4 categories of members :
Ex officio members: qualified persons, members of Boards of Directors and members of the Advisory Committee of the association ;
Professional members are microfinance associations , field associations, direct beneficiaries of PlaNet Finance actions ;
Supporting members are the volunteers or people close to the association who are still committed to it;
Representative members of the PlaNet Finance affiliated Associations (PlaNet Finance Mexico, PlaNet Finance Brazil, etc.)
2- All its members can involve themselves at several levels:
Firstly they all, as more than 1500 people who have made the demand, receive a monthly information letter about the activities of the association.
Next, they participate in the General Assembly of the association during which they can elect their representative for the association's Board of Directors. Each category of members presented above can elect his representatives for PlaNet Finance's Board of Directors :
Today the ex officio members have up to 22 representatives
Professional members can have 5 representatives
Supporting members can have 2 representatives
Representative members of the PlaNet Finance affiliated associations can have up to 15 representatives.
- Lastly, they meet regularly in the course of events organized by the association.
Is it really a non-profit association ?
PlaNet Finance is an International Non-Profit Organization (Association Law 1901), whose aim is to help in the eradication of poverty in the world, and in particular in the most disadvantaged countries. Its statutes may be consulted here.
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