Bloom Microventures provides microcredit to marginalized entrepreneurs in an attempt to tackle poverty using a unique model that harnesses the power of responsible tourism and microfinance.
By offering local day tours to surrounding rural communities, we give sociallyconscious tourists the opportunity not only to get a unique in-depth experience of the area but also to contribute to the development of these communities. During the tours, tourists gain knowledge of microcredit, take in a few local attractions and meet our pre-screened groups of microentrepreneurs to learn about their livelihoods and how they plan to grow their businesses with a microloan.
A significant portion of the tour fee provides the capital for the microloans extended to the microentrepreneurs whom the tourists meet (beneficiaries, who participate in the touristic activities, will help Bloom Microventures design how and when these visits will take place). We thus provide a new and effective way for our tourists to become personally involved in the fight against poverty. Should the tour income exceed the loan size requested by the entrepreneurs the remaining money is put into a fund to attain financial sustainability and support larger future loans.
After the microentrepreneurs receive the loan, the repayments are collected by Bloom Microventures over a pre-determined period of time. Considering the high repayment rates seen in microcredit and the default reducing mechanisms (such as self-selecting groups and dynamic incentives) built into our microcredit model, a conservative estimate of a four percent default rate per annum still allows a financially sustainable operation (following our projections, we will be sustainable within less than one year of operations).
Once sufficient revenue is generated over time, it will be possible to sustainably scale to additional locations and, depending on regulatory environments, provide savings and insurance services. Our project’s sustainability is furthermore enhanced through our online platform that will enable tourists to track the status of the microenterprises in which they have invested. In this way they can continue to support new initiatives and projects in communities to which they have developed a strong personal relationship.
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