Our micro equity finance model focuses on profit sharing. Clients get 80% and our company get 20% daily and monthly. Funds are continually provided.
We identify people who want to engage in micro business or need investment for their business, and interview them on the amount used or need. After that, we ask for daily profit if any and all personal expenses. We then subtract all daily expenses from daily profit to arrive at daily net profit or daily residual profit and multiply it by 30 days. This amount is then used as the basis for the amount to invest.
At the end of the month, the members receive salary on the monthly residual profit equal to the initial investment. The daily residual profit is collected and put aside to be used for their salary. There is no way they will pay the amount invested back.
To qualify for investment the entrepreneur’s monthly residual profit should be more than the investment amount by certain margin. The margin is then given to others for investment.
Our micro business investment service tries to concentrate on equity or residual accrued to business, and not on total sales of business. Equity or Residue / Net Profit of businesses is the leftover after all expenses deducted from total sales. We can point out that the net average profit is the profit accrued which is not spend on either the running cost or capita, transaction cost, human needs cost including anything that the individual used as human including children’s food. We mean leftover profit.
Micro finance usually provides loans at interest. Our investment attracts no interest and no collateral, and investment is replaced every month. Members get majority of the daily share, 80%, whereas our company gets 20%. At the end of the month customers get 80% of company share as replacement of capital. This way capital will never be eroded.
We have about 3 million people who need monthly investment of around $100. A member with $100 is expected to get $20 a day and $16 as a daily share while the company gets $4. At the end of the month the company gets $120 and replaces the customer’s capital which is $100. This will continue till the lifetime of the agreement.
A typical micro finance company gives a loan and customers are to pay the fixed amount for 6 months without replacement whereas we ensure replacement of the funds.
We already started with a few people, and they are producing excellent results.
The funding will be used for:
• Office space: 10%
• Operations: 80%
• Back up: 10%
We expect $500,000 against 30-50% equity shares for 5 years.
If you are looking for investment opportunities in Ghana, please take our model into considerations.