Commercial banks often consider that the poor are not creditworthy and think that the cost of administering many small loans is too high. Thirty years of micro-credit experience around the world shows that poor and low-skilled people are reliable borrowers who invest wisely and pay back in time. Experience also shows that women primarily focus on the needs of the family to a greater extent than men. It turns out that the majority of women, who have invested in everything from chicken breeding and mini-life to dairies and mills. Running a small business gives women the opportunity to control their own lives and thus become less dependent on men. Many have also gained greater confidence and participate more in various decision-making processes in their hometowns, despite the fact that women usually have an obscured role in many of the African communities.


Micro loan was introduced over 35 years ago. The idea is quite simple, by ensuring that poor people in the third world get access to money, through so- called. micro loans, in this way they could help themselves out of poverty while the lending institutions would make a profit. soon followed thousands of lending institutions, which in turn lent money to hundreds of millions of poor people in the Third World. The entire concept was supported from the beginning by, for example, USAID, World Bank and the UN. What are the problems then? The biggest problem is that it was assumed that as long as the poor were given the opportunity to produce something, there would be a demand for what was produced. This reasoning, that supply creates its own demand, is a known misconception and in classic economics is called Say’s law.



In fact, the problem is not on the supply side, there is generally no shortage of necessary goods in poor countries, but the problem lies in the fact that people cannot afford to buy them. When poor people take out loans to afford to produce goods, they soon discover that few people can afford to buy them. This lack of demand leads to two things: firstly, they take customers from pre-existing operations (Displacement) and partly lead to the over-supply of goods causing prices to fall, which means that both old and new businesses are forced to close (Exit). Those who fail, however, remain with their loans, which they have often taken at an interest rate of over 20% annually or more, often much more. Studies in, for example, South Africa show that over 90% of the loans go to pure consumption. These things easily lead to them getting into a debt trap (Debt trap) as they have to borrow more money to pay interest on their old loans etc.



Our micro-loan concept is based on the fact that we have private lenders from Scandinavia, who lend USD 1,000 – 2,000 for 3 years at ? % interest. There may be interest in some cases if it is a requirement from some lenders. But then to a maximum of 5% But the goal is for the interest rate to be 0% and run for 36 months.

The other big difference is that we only invest in smaller geographical areas. In this case, we have selected Uganda for prospective hub for Africa. This is so that it will be a quality of the loan and that it should go to an investment and not consumption. Training and assistance with our Micro loan system is about basic knowledge about what membership in a project group means, saving money, and how the credit system works. We will train a number of consultants who assist with the application and open an account with an associated Mastercard. When the loans are granted, Mastercard cards will be sent directly to our office in Uganda, which in turn allows our consultants to go out to their respective borrowers, log on to the computer and activate the card after the borrower has acknowledged the account. During the entire process, the borrower will be assisted by consultants on site for evaluation and assistance with the borrower’s business concept. When this is clear, we see this in our back-office system in Sweden, and the loan is paid to the borrower who can go to the nearest ATM and withdraw money and start his project.

Together with North Star Swiss and State Of Cards we have developed a system for micro loans for Africa to help women to start small businesses