Microfy – Small Loans, Big Dreams

Microfy – Small Loans, Big Dreams

United StatesIsrael
Organization type: 
nonprofit/ngo/citizen sector
Project Stage:
Growth
Budget: 
$10,000 - $50,000
Project Summary
Elevator Pitch

Concise Summary: Help us pitch this solution! Provide an explanation within 3-4 short sentences.

Microfy's mission is to help Refugees & Asylum seekers to sustain themselves and become economically independent by developing their own sources of income.

About Project

Problem: What problem is this project trying to address?

In 2007 The U.S. Committee for Refugees and Immigrants gives the world total as 62,000,000 refugees and estimates there are over 34,000,000 displaced by war, including internally displaced persons, who remain within the same national borders. The numbers are growing: In 2011, 4.3 million people were displaced; only 800,000 got refugee status (source). These populations often lack legal status at the country of temporary residence. As a result, most refugees and asylum seekers are not being able to access housing, health services, education and formal work. There is a need to create sustainable tools that can provide solutions to the financial needs of this growing population of asylum seekers & refugees around the world.

Solution: What is the proposed solution? Please be specific!

Microfy provides refugees and asylum seekers the tools to sustain themselves and become economically independent. These tools include: EDUCATION - Imparting knowledge within the asylum seeker and refugee community, regarding the regulations, social and business codes of the country they live currently reside in. SKILLS - Building partnerships to operate skill-building programs that provide refugees and asylum seekers with alternative ways to sustain themselves wherever they are residing. FINANCE – Providing financial services (credit, insurance and saving accounts) to refugees and asylum seekers. CONSULTANCY & MENTORING - Facilitating business consultancy through community volunteers to increase the life and sustainability of businesses established by refugees and asylum seekers.
Impact: How does it Work

Example: Walk us through a specific example(s) of how this solution makes a difference; include its primary activities.

Taklit is an African Refugee from Eritrea who arrived in Israel in 2009. He came with no money and only spoke Tigrinia (Eritrean language). Talklit heard about Microfy's busines course through ARDC (The African Refugee Development Center) which is Microfy’s main field partner and decided to join it. Microfy advised Taklit to attend ARDC’s English classes before starting the business coures. After completing the language class, Taklit joined the business course along with 12 other Refugees where he learned the following topics: - Business plan development - How to start a business - Management - Bookkeeping - Marketing Together with Talklit's little money saved from working as a cleaner and a small loan provided by Microfy, Talklit successfully set up an Internet café. The loan conditions were the following: - Loan amount: NIS 5,000 ($1,200) - Loan period: 6 months (monthly repayments) - Annual Interest Rate: 10% ($60) Microfy provided Taklit with a mentor (Noam, a employee from CitiBank) who was in touch with him twice a month to follow his progress and he informed us when Taklit was in need of business consultancy, legal advice or further financial assistance. Upon the repayment of his first loan, Taklit requested a second loan for the amount of NIS 10,000 ($2,500) for one year to help him hire additional staff.
Sustainability

Marketplace: Who else is addressing the problem outlined here? How does the proposed project differ from these approaches?

Local microfinance institutions (MFI's) are our main competitors. However, they generally provide small loans to local populations except Refugees due to their high risk of loan default and lack of clear legal status. Our partners include international aid organisations that cater for refugees and asylum seekers such as UNHCR as well as local companies such as Banks & Consultancy firms.
Team

Founding Story

I was doing my Bachelors degree in Economics in Israel with the dream of changing the world through Economics. Whilst doing research for my thesis, I came across Microfinance and I couldn’t stop reading about it. At the same time, hundreds of African refugees were streaming into Israel's borders and gathering at a park across from the Main Bus Station in Tel Aviv. A good friend of mine who was very involved in humanitarian work took me visit them. After that day, I started reading as much as I could about microfinance and refugees and decided to do a pilot program for the women refugees from Darfur.
About You
Organization:
Microfy
About You
First Name

Andrea

Last Name

Kruchik Krell

About Your Organization
Organization Name

Microfy

Organization Country
Country where this project is creating social impact
How long has your organization been operating?

1‐5 years

Has the organization received awards or honors? Please tell us about them

Yes, we presented one of our clients to the International Microfinance Awards organised by PlaNet finance and she won the award for Education. We were all invited to Paris to receive the award at the Louvre Museum. She was granted a trophy and one thousand Euros and we got a certificate. See video link http://www.youtube.com/watch?v=GnS_d7PSe5w (min 1:30)

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Innovation
How long have you been in operation?

Operating for 1‐5 years

Which of the following best describes the barrier(s) your innovation addresses? Choose up to two

Access.

Social Impact
Please describe the goal of your initiative; outline what you are trying to achieve
Which barrier(s) to financial inclusion does your solution seek to address? (select all applicable)

Physical and other accessibility obstacles that prevent communities from reaching financial services.

If you selected 'other' above, please specify which other barriers to financial inclusion you solution seeks to address:
For which underserved or excluded communities will your solution create access to valuable, affordable, secure and comprehensive financial services?

We are currently trying to raise funds to start a program for returning refugees in Juba, South Sudan. (Israel and other countries are sending back refugees to South Sudan.) In the first year we want to reach 100 entrepreneurs, build relationships with the different stakeholders as well as build and train a local team of paid field workers and volunteers. We expect to grow fast as there is urgent need for finance. With the right funding we would expect to reach 500 entrepreneurs in the second year and 2,500 in the third year.

Could your solution work in other geographies or regions? If so, where?

Urban areas in countries with high concentration of refugees & asylum seekers. Mainly countries with ambiguous policies regarding their legal status or lack of resources to deal with high flows of refugees. (see 4th map down for countries where refugees go to http://filipspagnoli.wordpress.com/2010/03/03/human-rights-maps-82-refug...)

If your solution is dramatically successful, how will things be different in 10 years?

- Microfy programs will be operating in countries with large refugee populations around the world, providing more refugees with basic access to finance and creating scalable impact around the world.
- Refugees will be more capable and motivated to turn their lives around. They will be better equipped to face the challenges of going back home and rebuilding a post war economy.

What will have had to have changed to make this happen?

Microfy will need to become a professional and structured International organisation with:

- Diverse strategic partnerships with local NGOs, governments, companies and local communities
- A professional and passionate team of people who believe in Microfy's vision to change the world
- A tailored and adaptable methodology with a proven success record

What has been the impact of your solution to date?

- 120 refugees & asylum seekers have participated in our programs
- 60 of them have completed the business course
- 30 of them have started new businesses (out of which 20 of them are still running)
- 100% of them repaid their loans

What is your projected impact over the next five years?
What barriers might hinder the success of your project? How do you plan to overcome them?

- Funding for Loans: We expect a much higher demand for loans than previously attained. In order to increase our loan fund, we want to partner up with Kiva, other crowd funding sources and private companies looking to make a social impact.
- Loan Repayments: Until today Microfy has 100% return on the loans provided. As the number of loans / customers increases and the change in working environments, the risk of default will increase. Adapting our current methodology to local communities will be crucial in minimizing this risk.
- Local Partners: It’s important to find the right partners and synergy between us, whilst continuously looking at ways to improve the nature and scope of our relationships.

Winning entries present a strong plan for how they will achieve and track growth. Identify your six-month milestone for growing your impact

Microfy’s new structure will be in place 6 months after receiving the funding in one or more different worldwide locations.

Identify three major tasks you will have to complete to reach your six-month milestone
Task 1

Mapping of the needs of refugee entrepreneurs, local business owners, refugee serving NGO's and other governmental organisations

Task 2

Build a team and train them based on the results of the mapping

Task 3

Adapt our current methodology to meet the needs of the community we are working with

Now think bigger! Identify your 12-month impact milestone

100 loans provided to refugee entrepreneurs

Identify three major tasks you will have to complete to reach your 12-month milestone
Task 1

Complete the mapping to ascertain whether there is need for Microfy’s solution and make sure the right infrastructure exists

Task 2

Build Strong partnerships to ensure a good marketing of our services

Task 3

marketing, marketing, marketing

Sustainability
Tell us about your partnerships

- ARDC (African Refugee Development Center). - Usually refugees first point of contact upon arriving in Israel. They refer refugees (customers) to us and provide facilities and volunteers
- Citi Bank - Funding & Mentorship
- TASC Consultancy - professional business consultancy (pro bono)
- “Masa Israel” - volunteers (interns)

Are you currently targeting other specific populations, locations, or markets for your innovation? If so, where and why?
What type of operating environment and internal organizational factors make your innovation successful?

800 caracteres

Please elaborate on any needs or offers you have mentioned above and/or suggest categories of support that aren't specified within the list