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Babyloan : France based peer to peer microlending platform

Team YS
7th Feb 2011
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Through babyloan.org, you can support micro-entrepreneurs living in challenging conditions that lack access to capital to launch or expand business activities. Baptiste Cammareri from Babyloan talks to YourStory about their journey so far.Babyloan was created in May 2008 and launched in September 2008 by Arnaud POISSONNIER and Aurélie DUTHOIT, Arnaud is a former banker (specialized in large portfolio and large amounts…) who turned to the world of NGOs with ACTED and helped them develop their microfinance activity. Back from the field, he strongly believed in Peer to peer model like Kiva, and wanted to launch a peer to peer site for microloans in France. Aurélie after her graduation from EDHEC Business school, moved to latin America to experience microfinance on the field and helped an MFI set up new loans and new policies adapted to rural areas. She worked in a bank for a short period of time where she met Arnaud, and the decided together to create Babyloan.org

Creating Babyloan was a real challenge because, as pioneers in France, they had to convince the central bank and get all the authorization for this activity that didn’t exist before.

Strongly convinced by the role of the people at the center of the economy, they launched Babyloan as a real social Business : Babyloan’s model aims at being sustainable, but all the shareholders have agreed in the status of the company to receive no dividends , and to reinvest all the profits in the main activity , to lend more money to MFIs in order to help small and medium MFIs to find new sources and cheap source of funding.

MicroFinance in France

In France, Microcredits have existed for 20 years through an MFI called “ADIE”. Babyloan always wanted to provide a Peer To Peer service of microfinance North/North, but until recently, the French legislation didn’t authorize individuals in France to lend to individuals in a Peer to peer model.

However, Arnaud POISSONNIER and Maria NOWAK (ADIE funder) proposed a new law . Finally in October 2010 a new law was enforced and authorized Peer to peer lending for French people by French people was possible. Thus babyloan entered into a partnership with ADIE and since the 1st of January 2011, people can lend to French micro-entrepreneurs.

How does Babyloan work?

Babyloan has several microfinance institutions as partners (in 11 countries) that are selected for their social policy, their financial stability and their global vision of microfinance (more socially than financially oriented!).

-         The microentrepreneurs that want a microcredit apply to the MFI.

-         If he is selected by the MFI, the money is disbursed (like any MFI)

-         For some clients (randomly selected by the MFI) The MFIs post the profils of micro-entrepeneurs on babyloan’s back office, these profils are translated by our team and put online.

-         The members of the Babyloan website (called “babyloanians”) select the micro-entrepreneur they want to support

-         2€ fee is charged to the babyloanian for every 100€ lent.

-         The babyloanian pays 52€ (for exemple) 2€ are for Babyloan administration fee, 50€ are sent to the MFI to refinance the loan that has been disbursed.

-         Every month the babyloanian is reimbursed of the partial amount of the loan (depending the amount and the length of the loan)

-         The money that is reimbursed goes into the Babylonian piggybank that can be withdrawn on its bank account, or lend again to another micro entrepreneur.

The money lent through Babyloan is lent without interest

Target market

Every one that has a bank account and a credit card in Euro can lend money on Babyloan and be an actor of microfinance

Operations in terms of geography

Babyloan offers microlending peer to peer North/South, North/North and hopefully south/south in a close future.

Lenders on Babyloan can lend money to micro-entrepreneurs from Benin, Togo, South Africa, Tajikistan, Vietnam, Cambodia, Philippines, Nicaragua, Ecuador, Peru and France

Visit Babyloan here : http://www.babyloan.org/en/

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