Funding a path out of poverty

Elliot Wilson explores how investors can back ventures that lend to the world’s poorest entrepreneurs

Prathminda Kaur is the modern version of the Little Match Girl, only with a twist: instead of perishing in a Victorian winter, she’s making a nice living for herself selling red onions and bell peppers in a Mumbai market. Kaur arrived in the Indian coastal city eight years ago. To start with she slept on the street, borrowing money from a loan shark at dawn, handing him more than 90 per cent of her profits at dusk. On an average day, the interest on her loans worked out to an annual rate of 10,000 per cent. But two years ago a friend introduced her to SKS Microfinance, an Indian lender that makes millions of tiny loans to local entrepreneurs like Kaur. She borrowed £100 which she paid back in full (with £75 interest) over the course of the year.