Lending circles are networks of people who borrow money from each other on a rotating basis and each member pays the loan back in installments. The loan is interest-free. As a result, it helps their members buy cars, make down payment for house, pay tuition fees and run businesses.
Takeaways : Lending circles build financial inclusiveness and foster economic empowerment. In addition,they are thriving among immigrant communities. However, because the model is entirely based on trust, members are carefully vetted and in some case you must be co-sponsored to join.
Advantages of Lending circle:
- Build wealth : Lending circles are not exclusively for people with no access to financial services. In fact, most successful businessmen and women are all part of a Trusted lending circle.
- Raising fund: The programs are a great way to raise zero interest rate fund hassle free. Lending circles collect and lend from hundred to thousands per day.
- Empower communities : They help build, rebuild and improve communities because all members have the same motive and nobody is left behind.
- Financial inclusion: The service provides banking services to people often shut out of the financial system because of bad credit or no credit. In addition, the program helps improves their credit score..