One of the strongest drivers for economic development, innovation and employment
A microenterprise, in the markets where Trill Impact Microfinance facilitates investments, is typically a business with one to five employees.
The businesses tend to be rather simple, e.g. a trader on a market, a small shop keeper, a simple manufacturing such as a seamstress, a shoe maker, a restaurant owner, or a small-hold farmer.
The most common way these entrepreneurs utilize the microloan is to boost productivity, or increase output:
- A seamstress sewing by hand can take a small loan to buy a sewing machine and fabric, with which she can increase productivity and profit significantly.
- A shopkeeper can borrow to buy larger quantities of stock for a lower price, thus increasing margins and revenues.
- A farmer can receive credit to buy crop seeds and repay the loan at harvest with a profit.
- A market trader, selling fruit during the day, can sell goods for twice or more of the price paid in the morning to a farmer.
The microloan should be used for productive purposes, meaning to finance the business and ultimately generate income for the microentrepreneur. Since the microenterprises generally have large profit margins the microentrepreneur can usually generate significantly larger profits than the costs of the loan.
In addition to microloans, microfinance institutions may also offer other products. Such products can entail:
- Home improvement loans, where the borrower uses the money to build, for example, an extra room in their house to be used as a shop, a workshop, an extra room or floor to rent out or for other productive purposes.
- Educational loans, paying for e.g., school fees, school uniforms, school books.
- Solar power loans, where the loan is used to buy an off-grid solar power system to provide clean energy for e.g., proper lighting and mobile charging devices, and over time ideally decreasing the energy costs of the household.
These products serve low-income households and aim to help individuals with personal aspects of their lives beyond the commercial microloan.