How does MFI’s source funds for loans?
First Premier Microfinance bank in association with participating foundations provides funding for clients through direct loans, grants, loan guarantees and other innovative financing techniques. Other funding comes from individuals, philanthropists, foundations, and governments and international institutions such as the World Bank. We also borrow funds from traditional banks to loan our clients. In addition, the interest paid by clients on microfinance loans goes back into the program to cover costs and fund more loans. One of the most attractive features of microfinance is the goal of self-sufficiency for both micro entrepreneurs and MFIs. By combining access to private market financing with more efficient management and technology, MFIs can begin to move from reliance on philanthropy to self-sufficiency.
