RCap is a social project to practice alternative microcredit. Moreover, RCap can make a systematic change in the 'Swedish Systems'. The business model can be replicated to any country. It will solve the problems that still exist on microcredit. It will help the govt. to reduce unemployment, poverty, can bring people from being the part of the problems to being the part of the solution, the vulnerable people can come back to the social structure of a country.

Problema

RCap will solve two different groups of problems: 1. Related to microcredit itself like- high interest rate, installment periods, involvement of field partners, loan without a proper plan 2. Related to the 'Swedish Systems', like: -The labor market structure is based on ‘right to work’ and ‘right to economic support’ for unemployed but not on ‘the right to be an entrepreneur’ -No special microfinance institution in Sweden -Banks are not interested to give loans to disadvantaged groups and they are prejudiced by the society -the existing “systems” failed to help the disadvantaged to return to the social structure. -Unemployment rate is 7.9%. They are living on social support from the govt. - 9% of the population is living under poverty line. - 54% of the immigrants are working.

Solución

Solution to Problem Group 1: The interest rate will be as low to maintain the breakeven point, no field partners; the base company will take care of everything, the installment period will be reasonable, every plan will be evaluated, the fund will be collected through crowdfunding as well as by the investment of the base company. The priority will be given to the disadvantaged groups. Solution to Problem Group 2: The base company has to be formed by individuals and has to be supported by the Public and municipal authorities, and civil society organizations in Sweden. If successful RCap would reduce the poverty and would be a financial gain for the govt. as the participation of the disadvantaged people in the program would reduce their dependency on social benefits, and would no longer be a ‘burden’ for the society rather would become a positive contributor to the GNP by paying tax. Thus, they would be shifted from being the part of the problem to being an active part of the solution

Ejemplo

There will be a website; a planner with a plan; a base company with the support from Public and municipal authorities, and civil society organizations; and investors/donors. How does the model work? An Example: 1. The planner will register through the website or in the local office of RCap. 2. The planner/borrower will come up with a plan 3. The base company will evaluate the plan and either accepts or rejects a plan 4. The accepted plans will be put on the website of the RCap with detailed information about the plans and the planners including their creditworthiness. The plans will be put on website for a certain period of time. 5. A Plan will primarily be funded by crowdfunding. The investors/donors will first register themselves on the website of RCap or at its local office. They will invest/donate on the plans according to the selected method of investing/donating out of few alternatives. If a plan is not funded by 50% by the investors/donors then the base company will regard it as a ‘bad’ plan and will remove from the website and the invested money will be returned to the investors/donors or they will be requested to choose other plans. But if it is funded at least 50% of the plan then the base company will be responsible to invest the rest of the money needed for the plan. 6. The base company will pay the money to the planner 7. The planner will repay the money according to the condition of the loan to the base company 8. The base company will pay back the money/product to investors as the condition of funding. It is important to clarify few points here: What are the alternatives to invest/donate on a plan? a. The invested money can be substituted by the product/service (either fully or partly) that is going to be produced by the planner. But there will be no interest on the principal amount invested in this case. b. Invest money and get interest on the invested money along with principal amount. c. Invest (or donate) anything other than money that is required to implement the project (for example, old computer, chairs and tables etc.). The investor will not get any money return on the thing invested. d. Invest money and get back the principal amount with or without any thanksgiving product/service from the planner but without any interest on the invested money. e. Donate the money to implement the project. In this case the donor will get nothing back but can decide whether wants to get any gift (for example, the products those are going to be produced) from the planner or not. f. A part of the money invested can be declared as a donation and the rest can be invested and earn interest or not earn on the investment. g. An extra amount, along with the investment or donation for the plans, can be donated to support RCap. h. There can be more than one investor/donor for a single project. Where does the base company get the money to invest on ‘residual amount’ (the part that is not crowdfunded yet)? It is important to say that the involvement of the Public and municipal authorities, and civil society organizations is to get help from them, firstly, to maintain the initial cost incurred to start up the social enterprise, secondly, to get a good base of networks where it will be easier to find both planners and investors/donors in the same network, thirdly, to fund the residual amount of a plan. Thus, the residual amount of the fund has to be supported by the authorities. On its maturity this residual amount along with the interest will be given back if it is funded by the social organizations if and only if it is demanded by them, or any other cases (either funded by the public authority or social organizations) the amount will be deposited to the base company’s account to use them for the next ‘residual investment’ on a plan and so on. How to decide the installment periods? The Company will take initiative to collect the installment/full payment from the planners and to repay the agreed amount of money or product/service to the social investors and/or donors. Few factors will be taken into account to calculate the starting date of the payment. If the project is seasonal, let’s say takes 4 months, the full amount (the principal and/or interest [if any]) has to be paid on 5th month. But if it is an on-going concern then the repayment schedule will be started after one year. The installment period can be weekly or quarterly or monthly. The effective interest rate will be 8% (p.a.) and interest will be counted from the day the loan has been provided. Thus the due interests (the interest that is due from the date the loan has been paid up to the start of the installment period) will be divided proportionately into the installment periods. The compounded interest rate will be applicable to the amount that is not paid on a certain installment. What happens if the planner fails to pay back? If there is a plan failed to perform, then the planner will take the full responsibility to pay back the capital and/or interest in due time. If the planner becomes bankrupt then investor will be paid proportionately (the amount that can be collected after the bankruptcy) according to the law of the country.

Mercado

Literally there are no competitors. But if it’s necessary to mention few then it is possible to say that different financial institutions like traditional commercial banks; other local financial institutions like ALMI can be the groups who are also providing loans. Their target group is totally different than RCap. RCap can capture a part of their customers as it will deal with any planner with a brilliant plan. Thus, it is appropriate to say that they will take RCap as a challenge or barrier for their success! We would rather say that the initial unawareness about RCap among people can be the most challenging part for RCap to overcome. Because, every sustainable change takes time and RCap will take time too