(I) MFI Partner's Role
The MFI partner serves as the primary liaison between the entrepreneur and lending parties and as such they have number of responsibilities.

1. Screen entreprenuers
Working solely in poverty-stricken areas, the MFI partner interacts with people seeking microfinance loans. As the ones working directly with the entrepreneurs, the MFI partner has the responsibility to screen prospective borrowers and approve of those that demonstrate both a need and an acceptable level of credit-worthiness based on a variety of factors.

Based on empirical evidence it has been shown that the very poor are in fact extremely credit worthy if the MFI partner lends only to groups. The probability of default on a group loan is much lower than it would be in the case of an individual loan, since there is a mutual dependence on one another in repaying their loans on time, that is to say the individual loans are dependent on the group’s timely repayment. Therefore group members mentor and support other members, and there is commonly an aura of peer pressure from the other members to maintain timely repayments.

2. Disburse and collect loans
After careful screening and disbursement of the loan the MFI partner will typically begin collecting after a brief postponement. As the primary liaison and organization in contact with the entrepreneur, the MFI partner has an obligation to ensure to the best of their abilities timely repayments.

3. Transparency
In addition to screening and supervision of loan disbursements there are certain reporting duties the MFI must undertake. As the only party in direct contact with the entrepreneurs the MFI partner has the obligation to report any and all relevant information.
  • Monitoring entrepreneur repayments
    United Prosperity requires that the partners submit a monthly report on the unpaid principle balance on all outstanding loans. If any loan is not being paid back, they should report the reasons for non-payment and other details like the date the MFI last contacted the entrepreneur.

    By monitoring individual delinquencies, United Prosperity and the partner are able to identify potentially defaults before they actually occur so steps can be taken to help avoid default.
  • Giving progress reports
    The partner must also share periodically the business and social impact of the loan on the entrepreneur and their families.
UnitedProsperity.org is a U.S. 501(c)3 non-profit organization