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I've read quite a bit about the positive effects of micro finance in developing countries. Organizations exist that solicit capital from donations and then make micro loans to people for the purpose of setting up some kind of business.

The loans are usually quite small, with little to no interest and are well under ten thousand US Dollars, typically reaching only hundreds of dollars. The pay back rate is also excellent. The programs that exist seem to focus on retail and agricultural endeavours, I have yet to see an organization with a focus on technology sectors like software development.

Do you know of any established / credible micro finance organizations that supply micro loans to individuals in order to set up software related businesses? Have the loans been paid back as well as other sectors, such as agriculture and retail?

I'm looking globally, so organizations in any country would be appreciated.

gnat
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Tim Post
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  • You mean in US? I can enumerate them for Belgium, and I'm not aware of any global ones. –  Nov 26 '10 at 10:46
  • @Pierre - No, globally. I'm hoping to discover some that are endorsed by _some kind_ of reliable third party if possible, or otherwise demonstrated to be trustworthy. Even if they only serve a select region, I'd still be interested in hearing about / researching them. – Tim Post Nov 26 '10 at 10:55
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    I can hardly imagine something like this... how could a typical business case look like? "I need 500USD to buy a PC and start writing software in my parent's basement"? – user281377 Nov 26 '10 at 11:06
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    @ammoQ $5,000 in some countries _is_ enough to start something, including an office and computers. You could conceivably do it with $2500 here in The Philippines. One of the things I hope to investigate is the average value of the loans. Additionally, in the cases I imagine, people have at least the beginnings of something and need help getting it to market. – Tim Post Nov 26 '10 at 11:13
  • Ah, I see. Here in Austria, the costs of living are ~ USD 2K p.m. upwards, so a microcredit could never be enough to get anything serious started. – user281377 Nov 26 '10 at 11:24
  • @Tim: when you will have all the details you needed, will you share your findings with by answering your own question? I'm very interested by the subject myself. Especially for helping some people I know from emerging countries. –  Nov 26 '10 at 12:27
  • @Pierre - Yes. This whole question started when I noticed that a Paypal subscription had been paid (I give a little monthly to grameenfoundation.org), and started wondering. Glad to know I'm endeavouring to satisfy more than my own curiosity :) – Tim Post Nov 26 '10 at 13:16
  • @ammoQ - Indeed. In countries like Austria, one would probably seek out actual venture capital. I'm curious to find organizations that just (micro) fund without strings (well, no strings other than saying the money must be paid back in a certain amount of time). – Tim Post Nov 26 '10 at 13:18
  • Tim: Not necessarily venture capital (that's not easy to get too), but a regular financing, with some strings attached (like providing collateral). – user281377 Nov 26 '10 at 13:47
  • @ammoQ - Exactly. Either one is a more 'conventional' route. – Tim Post Nov 26 '10 at 13:51

1 Answers1

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Community Driven Funding

The closest thing I know is called Kickstarter.

What is Kickstarter? We’re the largest funding platform for creative projects in the world

It is not specifically bound to software development. My understanding is that it is only available to the US market.

An alternative if you don't like Kickstarter: Ulule.com that is global.

Both of them are community driven. Money comes from people like you and me, and not funds or banks.

National or Regional Fundings

In many countries (especially europe) there is local help by governments. In Belgium there is called "Bourse de préactivité". They give up to 12.500 Euros to any individual that will come up with an innovative idea and want to create a business with it. It's a subsidy. There is Awex that promotes exportation and refund you up to 50% of your charges for your presence in international trade shows or the fact you build a multi-language e-commerce website.

I'm sure every country has his own programs.

Microsoft has a lot of Microsoft Innovation Centers in the world. Many of them are joint ventures with the local government. They are aware of all financial tools you could use in your local country, and they will certainly help, even if you are not in Microsoft eco-system.

  • +1, Thank you - exactly the kind of groups I'm looking for. – Tim Post Nov 26 '10 at 11:15
  • Saw your edit ..and some research done on several SE Asia countries shows that yes they do have programs, but mostly for (you guessed it) agriculture / retail. There is heavier government interest in things like business process outsourcing, but nothing (that I can find as of yet) for real innovation / technology development. – Tim Post Nov 26 '10 at 13:19
  • You may want to try to contact local Microsoft Innovation centers. There is one in Philippines (http://pinoybusiness.org/2009/03/19/microsoft-innovation-center-to-be-launched-at-up/). Since most of the time they are joint ventures with the local gov, I'm sure they are aware of tools you can use. Will add that in the answer for others. –  Nov 26 '10 at 13:39
  • @Pierre - I will. It's neat that we share a common interest. – Tim Post Nov 26 '10 at 13:52
  • @Tim: oh yeah, on of my next big objective is to take a tea with you in Philippines so we can discuss how we are going to help developers from emerging countries. –  Nov 26 '10 at 14:45
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    @Pierre, That would be enjoyable. :) – Tim Post Nov 26 '10 at 15:24