MICROCAPITAL STORY: New Online For-Profit Microfinance Lending Engine GlobeFunder Closes Seed Round of Funding at USD 1.5 Million

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Tuesday, July 24. 2007

GlobeFunder is a global online lending engine for small loans scheduled to launch in October 2007. The concept of the company is as follows: to assist consumers globally with lower borrowing costs while providing a new marketplace for investors to earn profitable returns. GlobeFunder‘s leadership focus is as a scalable provider of loan funding at market-driven interest rates (see interview with GlobeFunder Co-founder and CEO Brian Mullally at P2P-Banking.com blog).

The seed round of equity financing at USD 1.5 million for GlobeFunder was just closed. GlobeFunder is scheduled to launch in the US in October 2007, and in a large developing market later in the year. In addition to GlobeFunder’s 2007 US launch, several other markets globally will be created for the firm in the first part of 2008. GlobeFunder, once launched, will be a global peer-to-peer (P2P) lender. Using a beta transactions platform, the institution will unite investors, borrowers and microfinance institutions (MFIs).

The main difference between GlobeFunder and the arguable forerunner of P2P banking, Kiva.org (Kiva), is GlobeFunder’s for-profit, scalable marketplace where borrowers save money and lenders make money, and where MFIs can access direct capital from lenders to grow their loan portfolios. Under the GlobeFunder scheme, lenders earn interest, and they will be incentivized through promotions and profits to keep them lending money. Additionally, investors select which borrower(s) they want to lend money based on criteria they choose, such as the borrower's business model.

The company is working on building partnerships with leading financial institutions and microfinance institutions. Thus far, GlobeFunder has partnered with over 40 MFIs around the world. These MFIs include: SEED Development Group, Rural Agency for Development (Rafode), and Horizon. MFIs that partner with GlobeFunder select and input their borrowers to be posted on GlobeFunder's website. MFI partner are screened by GlobeFunder to ensure reliability, and these MFI partners also screen their borrower clients to assess the likelihood of loan repayment.

--Chryssa Rask, MicroCapital Writer

Additional Resources:

AmericanVentureMagazine.com: GlobeFunder Closes Round of Seed Funding

GlobeFunder.com

GlobeFunder: About Us

GlobeFunder: How It Works

P2P-Banking.com Blog: Interview with Brian Mullally, Co-Founder and CEO of GlobeFunder Ventures Inc.

Posted by microcapital in Events at 12:57

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