What is United Prosperity?
United Prosperity is the world’s first person to person loan guaranteeing website. Small entrepreneurs all over the world need funds to start and grow their businesses. Banks however don’t lend to them without collateral. Small entrepreneurs cannot give collateral since they are often very poor. You can become a social guarantor by providing cash collateral to the entrepreneur on our website. Your guarantee allows the entrepreneurs to access funds from local banks either directly or through our partners.

How do loan guarantees work?
The process of guaranteeing loans for MFI partners involves the following steps:

1. Our MFI partners upload the profiles of poor entrepreneurs seeking loans.
2. You, the social guarantor, select the entrepreneur(s) you want to support and contribute funds to guarantee their loans.
3. United Prosperity consolidates the payments received towards all entrepreneurs presented by the same MFI partner. With the aggregated funds, United Prosperity issues a cash-secured guarantee to a bank on behalf of the MFI partner. Based on the guarantee, the MFI partner is issued a loan from a local bank, and lends to the entrepreneurs that you and others have selected.
4. Once the entrepreneurs repay the loan to the MFI and the MFI repays the loan to the bank, your guarantee gets freed up. At that point, you can either withdraw your money, or use to guarantee the loans of other entrepreneurs.

In some cases, our partners will be involved in facilitating the loans to entrepreneurs but not making the loan themselves. In such a case, United Prosperity would issue a cash-backed guarantee on behalf of the entrepreneur and the bank would lend directly to the entrepreneur.

What are the advantages of giving loan guarantees rather than loans?
1. Because guarantees are generally only part of the loan amount, with a guarantee, your money has a bigger impact.
2. Our guarantee facilitates the creation of local linkages between domestic banks, MFIs and poor entrepreneurs. In the course of repaying the loan, both the entrepreneur and the MFIs develop credit histories that will enable them to access more funds at a later date with a lower guarantee percentage, or even without a guarantee. MFIs also get to form relationships with banks and offer other products like savings, insurance, money transfer etc. through the bank.
3. There is no foreign exchange risk since the loan from the Bank to the MFI, and from the MFI to the entrepreneur are in local currency.
4. Our guarantee reduces the interest the bank will charge the MFI since the bank’s risk is lower. Some of the interest rate benefits get passed on to the entrepreneur.
5. There is enough money available in the developing countries. Our guarantee frees up those funds. It utilizes available capital effectively and in the long term it is a more scalable model.
6. We get the additional benefit of monitoring of the loan to the MFI by the bank which is not available with other person to person models.

How long does it take for an entrepreneur to receive the guarantee?
A ‘guarantee needed by’ date is posted in every entrepreneur’s profile. The entrepreneur is expected to receive their loan within 4-6 weeks of that date.

How can I help United Prosperity?
For ideas of how you can get involved, please visit the Get Involved page of the United Prosperity website or see the Get Involved section of this forum.

If you have any questions about United Prosperity, please ask them here!

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United Prosperity issues a cash-secured guarantee to a bank on behalf of the MFI partner.

Is this guarantee in US dollars or local currency? If in local currency, what happens to exchange rate gains or losses?
I presume the guarantee is in dollar and that there is no xchange rate gains or losses.
The guarantee funds remain in USD. The MFI has to repay the bank in local currency. Thus the MFI, entrepreneur and guarantors are mitigated from currency risk.
Hi Bhalchander

This is a key advantage of UP. It has caused grief to other micro-finance organisations. Certainly worth highlighting when pointing out the advantages of the guarantee vs the loan system.
Andreas - Agree. That is a major advantage. Many people still don't know about it.


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