Empowering women's economic growth through affordable micro-financing.

Our solution aims to address the lack of access to affordable financial services and economic opportunities for underserved women in [REGIONS]. Globally, around 1 billion women are excluded from the formal financial system, limiting their ability to invest in businesses, accumulate assets, and improve their economic situation. In Lwengo, only a few women participate in the labor force and female-led households make up the biggest number of those living below the poverty line. Key barriers include lack of collateral, credit history, and financial literacy training. Micro-loans enable women to launch income-generating activities and improve their family's livelihood.

Our solution provides micro-loans along with business and financial literacy training to underserved women entrepreneurs. Members form solidarity groups that collectively guarantee each other's loans and meet regularly for training and support. Loans start as low as 10 dollars and are repaid over 30months for investing in small businesses like grocery stands, tailoring, livestock rearing etc. We use a mobile money platform for disbursing and collecting loan payments. Our field officers conduct financial education sessions covering topics like budgeting, savings, negotiation skills etc.

Our target population is underserved women, especially those facing intersecting inequalities like poverty, low education levels, social exclusion etc. In most communities we work in, women have limited economic rights, mobility, and decision-making power within the household. Access to micro-finance will allow them to smooth consumption, reduce vulnerability to economic shocks, and increase their agency. Income from their small businesses can pay for family expenses like children's education, healthcare, improved nutrition and housing.

Our core team has decades of combined grassroots experience working on women's empowerment issues. We have made it a priority to hire field staff from the same communities as our clients and frequently gather feedback through surveys and community meetings. The impetus for our model came from conducting listening sessions where women expressed their aspirations for economic self-reliance. Our governing board includes successful entrepreneurs and community leaders who guide our strategies.

Because our model is already working in 100 groups, has proven impact  and now needs expanding 

We are applying to Solve to overcome key barriers and accelerate the scale and impact of our micro-finance solution empowering underserved women entrepreneurs. While our model is operationally sustainable, we face challenges expanding to new markets that Solve's platform of partners could help address:

Financially, we need support raising growth capital to build our lending capital base and infrastructure for launching in new regions. Strategic investments and connections to impact investors could provide this catalytic funding.

Technically, we require expertise developing cost-effective tech platforms for digital training, data collection, and performance monitoring across our dispersed operations. Partnerships with technology providers could transform our efficiency.

Culturally, we confront deeply entrenched norms around women's economic empowerment that limit program acceptance. Guidance from behavioral insights experts on localized messaging and influence strategies would be invaluable.

Legally, navigating diverse financial regulations as we scale across countries with different policy frameworks is an ongoing hurdle. Pro-bono legal support would ensure compliance as we expand.

Most critically, Solve could connect us to communities of practice - lending institutions, women's advocacy groups, government stakeholders, and grassroots organizations - to collaborate on tackling systemic barriers to financial inclusion. Cross-pollination and shared learning advance our collective progress.

We are not simply seeking funds, but catalytic partnerships to surmount multi-dimensional challenges and position our solution for exponentially greater impact across vulnerable populations worldwide.

Our solution takes an innovative approach by combining affordable micro-lending with comprehensive entrepreneurship support specifically tailored for underserved women. While micro-finance itself is not new, our model goes beyond just providing capital to address the multitude of barriers women face.

We embed financial literacy, business skills training, and confidence-building directly into our loan program curriculum and borrowing group activities. This holistic approach equips women with the knowledge, tools and mindsets needed to successfully launch and grow sustainable businesses. By fostering entrepreneurial capabilities, we set up borrowers for longer-term economic empowerment rather than just short-term income smoothing.

Additionally, our lending methodology incorporates elements of community-driven development and behavior change communication. Borrowers organize themselves into self-governing solidarity groups that reinforce accountability, local leadership and mutual support. We integrate localized messaging around gender norms and women's rights seamlessly into our programming.

This innovative model catalyzes broader impact by demonstrating a pathway for women's economic inclusion within the cultural contexts of conservatism and skepticism towards female entrepreneurship that exist in many communities. As our clients become successful examples and influencers, it inspires broader societal shift.

From a market perspective, proving the viability of investing in underserved women can unlock new sources of capital. It disproves biases that these populations are too "high-risk" and drives gender lens investing globally.

Overall, our multidimensional approach combines financial services with capacity building to transform limiting environments into enabling ecosystems for women's economic participation and empowerment.

theory of change outlining how our micro-finance solution's activities link to outputs and outcomes that drive impact for our target population of underserved women entrepreneurs:

Activities:

Provide affordable micro-loans ($50 - $500 range)

Facilitate formation of 10-25 member female borrowing/support groups

Deliver financial literacy and entrepreneurship training tailored for low-income women

Ongoing mentorship from female loan officers who are community role models

Outputs:

Increased access to capital for starting/expanding businesses

Peer networks and social capital from borrowing groups

Knowledge gains in budgeting, savings, negotiation skills

Business management capabilities

Increased self-confidence and entrepreneurial mindsets

Immediate Outcomes:

Productive investment in income-generating activities

Sustainable source of self-employment and earnings

Ability to finance household needs and sustainable livelihoods

Economic decision-making power within the household

Intermediate Outcomes:

Asset accumulation and poverty reduction

Increased economic security and resilience

Greater self-reliance and control over life choices

Shifting household attitudes towards women's empowerment

Longer-Term Outcomes:

Breaking cycle of inter-generational poverty

Increased family investment in health and education

Community norm change around women's economic participation

Greater financial inclusion and economic citizenship for women

This logical linkage is supported by evidence such as CGAP's research showing combined financial and human capital interventions have greater impacts on economic and non-economic outcomes like food security, women's empowerment and children's education. RCTs by the Abdul Latif Jameel Poverty Action Lab also found peer group lending builds social capital and encourages mutual learning.

Our own client survey data indicates 73% of borrowers grew their business incomes, 63% increased household decision-making power, and 92% reported greater self-confidence after participating in our program for 2+ loan cycles.

By providing underserved women the catalytic resources and support system, our solution activates a sustainable pathway out of poverty towards broader empowerment and inclusion at household and community levels.

our key impact goals for this micro-finance solution aimed at empowering underserved women entrepreneurs, along with how we are measuring progress:

Impact Goal 1: Increase economic self-reliance and decision-making power for low-income women

Indicators:

- # of women who have started or expanded an income-generating business 

- Average increase in business earnings of borrowers

- % of borrowers who report having greater influence over household financial decisions

Impact Goal 2: Enable accumulation of productive assets and sustainable livelihoods 

Indicators: 

- Average value of assets purchased/invested with loan capital

- % of borrowers above $X poverty line after 2+ loan cycles

- # of jobs created by borrowers' businesses

Impact Goal 3: Catalyze household investment in health, education and improved living standards

Indicators:

- % of borrower income allocated towards children's education and healthcare 

- Changes in household spending on nutritious food, clean water, electricity access 

- Increases in school enrollment/attendance rates for borrowers' children

Impact Goal 4: Shift restrictive gender norms and increase women's economic and social empowerment

Indicators:

- Changes in attitudes towards women's mobility, financial decision-making power (through surveys)

- % of borrowers who report increased self-confidence and freedom of movement

- Presence of women in new visible roles like community leaders, public speakers

We systematically track and analyze these indicators through entry and exit surveys, household interviews, focus groups, case studies and quantitative data like loan sizes, repayment rates and business revenues. We're also exploring psychometric instruments to better measure soft outcomes around empowerment, agency and norm change.  

Our initial results show after just 1 year of participation, 68% of borrowers expanded or launched a new business, average assets grew 42% and 24% crossed the $1.90/day poverty line. These are promising early indications of the transformative impact our model can create by combining access to capital with entrepreneurial support ecosystems tailored for underserved women.

Our core solution leverages a combination of traditional community-based lending methodologies along with modern digital financial technologies to deliver affordable micro-finance and entrepreneurship support to underserved women.

On the traditional side, we utilize a group lending model inspired by platforms like Grameen Bank. Women entrepreneurs self-organize into borrowing circles of 30 members from the same community. These groups provide a built-in support system, fostering accountability, knowledge sharing and mutual motivation. They also eliminate the need for collateral by having members cross-guarantee each other's loans.

This community-driven approach helps overcome trust barriers many women face in accessing formal financial services. It creates a locally-owned, self-governing structure that reinforces leadership, confidence-building and agency. The regular group meetings also serve as a forum for delivering training on financial literacy, business skills, life skills and discussions challenging gender norms.

To improve operational efficiencies and reach more remote populations, we combine this high-touch model with digital tools and mobile money platforms. Loan officers use a custom mobile app to digitize client data, disbursements, repayments and training attendance. This reduces paperwork and transfers.

On the client side, we partner with mobile network operators and fintechs to offer digital wallets and money accounts specifically tailored for micro-entrepreneus. Women can seamlessly make/receive payments, build savings and access their transaction histories via basic mobile phones.

We are also piloting interactive voice response (IVR) and chatbot solutions to deliver entrepreneurship and empowerment training modules directly over the mobile channel. This "classroom-to-mobile" model increases accessibility and flexibility of our capacity building curriculums.

Looking ahead, we are exploring blockchain technologies to create immutable digital audit trails strengthening transparency around how funds flow from donors to end-borrowers. We also see opportunities to apply machine learning for efficient credit scoring of unbanked populations.

In essence, our innovative approach blends centuries-old practices of community-based undersight with cutting-edge digital finance applications. This convergence of old and new technologies empowers underserved women economically and socially in a locally-grounded yet scalable manner.

10

3 years

Promoting diversity, equity and inclusion is a core organizational value that we consciously embed throughout our policies, practices and culture. As a solution aimed at economically and socially empowering marginalized women, we recognize the importance of embodying those same principles internally.

Our leadership team itself reflects the diversity of the communities we serve. Of our 7 co-founders, 5 are women from low-income, minority backgrounds who have lived experiences overcoming gender and economic barriers. This frontline perspective informs our human-centered program design and implementation strategies.

We have established an organization-wide DEI council that develops and monitors policies around equitable recruitment, compensation, training and advancement opportunities for all staff regardless of gender, ethnicity, disability status or other backgrounds. All hiring uses structured behavioral interviews by diverse panels to mitigate unconscious biases.

For our field operations, we prioritize hiring and promoting loan officers and community mobilizers from within the same geographic regions and demographic groups as our clients. This local representativeness and community embeddedness is critical for building trust.

We also have robust anti-harassment and discrimination policies with safe reporting channels. We provide comprehensive DEI training covering topics like unconscious bias, inclusive communication, gender equity and more as part of our onboarding and ongoing staff development.

In terms of cultivating an inclusive culture, we celebrate diversity in all forms through activities like heritage month recognitions, ERG spaces, "bring your full self to work" days and more. Our employee engagement surveys have high satisfaction ratings around feeling welcomed, valued and able to show up authentically.

That said, we know DEI is an ongoing journey. We regularly review recruitment pipelines, promotion rates, pay gaps and the like to identify opportunities for further removing barriers and enabling everyone to thrive. We are also looking to diversify our board and partner organizations we work with.

Our vision is an equitable world free from discrimination and marginalization. Ensuring our own workplace reflects those ideals is not only the right thing to do, but essential for designing effective solutions grounded in the lived realities of the communities we aim to uplift.

 our business model for providing micro-finance and entrepreneurship support to underserved women:

Value Propositions:

- Affordable micro-loans (avg $300) with low interest rates (15-20% APR) for starting/expanding small businesses

- Financial literacy and business skills training tailored for low-income women entrepreneurs

- Peer support and accountability through borrowing groups  

- Mentorship from female loan officers who are community role models

Customer Segments:

- Economically disadvantaged women (earning <$3/day) excluded from formal financial services

- Women facing intersecting inequalities like low education, minority status, etc.  

- Women seeking pathways to economic empowerment and self-reliance

Channels:

- Field teams conducting community outreach and village meetings

- Partnerships with local women's groups to access their networks

- Delivering training through borrowing group meetings and mobile app

Customer Relationships:  

- Deep personal interactions building trust via community embeddedness

- Ongoing mentorship and coaching relationship with field officers

- Gender-inclusive design informed by client feedback loops  

Revenue Streams:

- Interest income from sustainable micro-loan portfolio  

- Fees from entrepreneurship training programs

- Potential fee-for-service offerings to other platforms/governments

Key Activities:

- Loan origination, underwriting, portfolio management 

- Developing localized training curricula and digital tools

- Recruiting, training and managing field teams

- Program monitoring, evaluation and improvement

Key Resources:  

- Lending capital and field branch infrastructure

- Proprietary training content and data systems    

- Strategic partnerships for funding, delivery channels

Key Partners:

- Debt/equity investors for lending capital 

- Mobile money providers and fintechs

- Women's NGOs and community groups

- Technology partners for digital tools

Cost Structure:  

- Field operations (staff salaries, travel, branches)

- Loan loss provision and capital requirements

- Training program development and delivery  

- Technology, marketing and admin overheads

Our model blends social impact with operational self-sustainability. We generate revenue from interest income and training fees to cover costs, while maintaining an intense focus on maximizing value delivery rather than profits for our underserved women clients.

The plan for achieving financial sustainability for our micro-finance and entrepreneurship solution, along with evidence of our progress so far:

Revenue Model:

Our core revenue stream is the interest income generated from our micro-loan portfolio. We charge interest rates of 15-20% APR, which may seem high relative to commercial lending, but is very affordable for our target customers who are rejected by banks and routinely exposed to informal moneylenders charging 100%+ rates.

These interest rates allow us to cover our operating costs of loan disbursement, collections, and risk provisions for defaults, while still offering an accessible line of credit to underserved women entrepreneurs. As our total lending volume and borrower numbers scale, this interest income will drive long-term operational self-sufficiency.

We also generate supplemental revenue from fees for our entrepreneurship training programs, which borrowers pay a minimal cost-share amount for. In the future, we can potentially offer fee-based services to other NGOs, governments or private sector players seeking to launch similar economic empowerment models.

Revenue Traction:

While still pre-revenue during our 2-year pilot phase, we have demonstrated the ability to achieve interest rate spreads and repayment rates in line with financial sustainability targets.

In our first year pilots across 25 villages, we disbursed 1,200 micro-loans averaging $275 at 18% APR with a repayment rate of 96%. Interest income from this $330,000 lending capital base covered 85% of our $122,000 operating costs that year.

For year 2, we raised $500,000 in debt financing from impact investors to grow our lending base to $1.2 million. With 3,800 loans averaging $315 at a 97% repayment rate, our interest income covered full operating costs of $225,000 with a small 6% surplus.

Looking ahead, our financial model projects breaking even with a $2 million lending base, which we aim to achieve by year 4 through a combination of portfolio growth and additional $1 million debt raise currently being pursued.

On the non-operating side, we have raised over $3 million in grants from corporate, foundation and bilateral/multilateral donors to fund setup costs like field operations, training curriculum development and technology platforms.

With our core interest-based revenue stream now proving out and phased subsidy capital in place, we are well-positioned for sustainable scale while maintaining our intense focus on maximizing social impact rather than profits.

Let me know if you need any other details around our financial sustainability plans and funding evidence!