With support from Development Innovation Ventures, the University of Oxford and partners Buzz Women and Yunus Social Business are testing the effectiveness of microequity contracts with women microentrepreneurs. The microequity contract structure is more flexible than traditional microcredit, with payments that are contingent upon the microenterprise’s revenue and a three-year term. Workin...
SEE ALLWith support from Development Innovation Ventures, the University of Oxford and partners Buzz Women and Yunus Social Business are testing the effectiveness of microequity contracts with women microentrepreneurs. The microequity contract structure is more flexible than traditional microcredit, with payments that are contingent upon the microenterprise’s revenue and a three-year term. Working with tailoring and animal husbandry entrepreneurs, the project will explore how performance-contingent repayment terms affect demand for microequity and how microequity affects microenterprise growth. Researchers are offering half of the participating entrepreneurs an investment of approximately $1,400 in the form of assets and inventories that the entrepreneur chooses, with the other half serving as a comparison group. The tailoring and animal husbandry sectors allow production to be monitored, which is key to enforcing a microequity contract. If successful, microequity financing has the potential to be an impactful offering for many of the 10 million microentrepreneurs in India.
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