With about 300 million people living below the poverty line in China, microfinance–most commonly defined as small loans for impoverished individuals to help them achieve financial self-sufficiency–is an attractive option.
Wokai.org, “a capital-contributing microfinance intermediary,” is trying to bring money to Chinese entrepreneurs who want to set up like set up their own small businesses, like dumpling shops, fruit and veggie stands, and animal husbandry practices.
“While we are a fundraising platform, we’re also an information platform, and we’re building a community around China microfinance in the United States,” McColgan says. She started the Internet-based nonprofit in the fall of 2006 with fellow American Casey Wilson. The two met while studying advanced Chinese at Tsinghua University, and since then, they have set up Wokai’s headquarters in Beijing and established three U.S. chapters: Seattle, San Francisco and New York. For now, they’re still recruiting a replenishable stream of interns and volunteers to help raise awareness about microfinance in China, as well as research potential lenders and set fundraising goals.
Wokai, which means “I start” in Chinese, fosters entrepreneurship and fights poverty by raising loan capital online from individual contributors for microfinance institutions (MFIs) in China. Its goal is to expand financial opportunities for the country’s poor (and mostly rural) population. Though its primary goal is fundraising, Wokai also provides “capacity building” for microfinance organizations, which can mean anything from emotional support for first-time borrowers to computer training for loan managers.
How does it all work? According to the Web site,
Wokai partners with local MFIs which identify and screen potential microentrepreneur clients. Selected clients are then posted on the Wokai website through profiles that outline their business ventures and loan request. Contributors browse these profiles, select who and how much to finance, and then transfer money to Wokai through our online payment system. Once funds are transferred, Wokai distributes this loan capital to partner MFIs for allocation to microentrepreneurs. At the end of the loan cycle, partner MFIs collect loan repayments and re-issue loans.
Read my extended post on WorldChanging.com.
In the meantime, LISTEN to my podcast interview:
Music courtesy of MadMaxXB from Garageband