Anyone who’s looking to be an entrepreneur is probably aware of the fact that a great idea is only the beginning.
There needs to be an infusion of capital before anything else can happen. After all, money makes the world go round. These resources will go toward the purchase of materials, all the way to the hiring of staff or the renting of office space. With so much hanging in the balance, it can get very difficult for individuals without enough capital to get anything done.
There are options of course, such as trying to get a loan from a bank. While there’s always the question of eligibility, if you do end up being given a loan, the problem becomes eventually paying it back. Depending on the amount that you receive, the interest rates could end up being a bigger issue than you might expect. As much as it gives, this option simply isn’t geared toward startup businesses.
Where microfinance comes in
The biggest issue that people tend to have when they take a loan is being able to pay it back. Sharone Perlstein, an expert in the field of microfinance will tell you that the repayment rate for microloans is almost as high as 99 per cent. Considering the amount of success that many see when it comes to taking this type of loan, it’s comes as no surprise that it’s beginning to rise in popularity. While microloans don’t offer as much as a traditional loan does, this is exactly why it’s such an attractive prospect.
When less starts to become more
For many startup entrepreneurs out there, an infusion of capital is necessary, but too much can be a waste. After all, it’s a startup – where it’s better to play it safe at the beginning. Not having to worry about so much interest, while being given a sufficient amount to get things going is a great way to start one’s business.
This is exactly why the collected data shows so much promise. All these individuals experienced a good amount of success, which they then used to pay their debts in full.
They can choose to continue the cycle if they wish, but more often than not when everything shifts into high gear it’s likely they won’t even need the help of microfinance anymore. It’s a financing alternative whose benefits outweigh the risks.
To conclude, the startup entrepreneur can achieve a great deal thanks to microfinance. Sharone continues to try to expand microfinance in more developing countries, because believe it or not they benefit even more.
This is because it takes less money in a developing region to accomplish something that would take more money in a first-world country. With so much potential waiting to be unlocked, the future of microfinance looks bright.
