Posted on November 7, 2008 - by James

Offshore Microfinance - The Only Legitimate High Yield Investment Program?

If you are looking for one of the very few genuine ‘high yield investment opportunities,’ you couldn’t do much better than microfinance - that is loaning money in small amounts at high interest rates to small business people in developing countries. The great thing about this investment is you can earn great returns and do good, helping entrepreneurs in the developing world, at the same time. It is something myself and a few of my clients have been investing in for several years now.

It might sound risky, but there are now a number of stock-market listed companies you can invest in who do this as their primary business - and they are doing it very well.

The borrowers typically have no formal credit history and have often been passed over for loans by mainstream banks, but they usually have excellent business acumen - and a way to turn a profit quickly. Many of the borrowers are women. Audited statistics show collection rates on the loans are excellent, often far exceeding those of mainstream banks. This is because micofinance works on a different, more personal basis using peer group support and credit management. Borrowers feel responsible to other people, rather than to faceless banks.

Microfinance, simply the granting of small loans, has its origins in the social movement. It has long been supported by low-interest loans and subsdidies from non-governmental organisations, foundations and so on over recent years. You’ve probably heard “give a man a fish and you feed him for a day… teach him to fish and you feed him for a lifetime.”… [click here to read the rest of this article...]