Frequently Asked Questions

Why microfinance?
Microfinance enables to lend to the poor under fair conditions while respecting their own business plans and initiative. Therefore, it builds self-confident individuals independent on external aid. 
Such form of cooperation is sustainable and independent of government subsidies and donations which disrupt the local market environment in the long term and are justifiable only in sectors such as elementary health care and education, i.e. in sectors that should never be profitable in the first place.
In that case, the interest should not be seen as something harmful but as a fair reward for the lender.
How does microfinance help the poor?
Microfinance enables the poor to increase their income, build their businesses and reduce their vulnerability. It can also be a powerful instrument for self-empowerment as it enables women to become economic agents of change and win respect in their communities. Microfinance clients often improve their educational level and their social status.
Why are cooperatives so important for development of rural regions?
The cooperative is an autonomous association of persons who voluntarily cooperate for their mutual, social, economic and cultural benefit*.
Compared to other types of companies, the advantage of cooperatives is the limit of votes per member, which inhibits concentration of power and capital to few shareholders. The wealth is thus equally distributed among members. Savings of the savers help many poor families, through transparent and democratic process.

* Statement on the Co-operative Identity. International Co-operative Alliance.

What are the benefits of membership in a cooperative?
Membership in cooperatives implies becoming a shareholder of a cooperative with one vote right, which permits you to save with the other members. It is possible to make a one-off investment or periodical smaller payments. Apart from the guaranteed interest income, there are shared dividends - in successful years. The members have the right to participate in general meeting, which decides democratically on the profit sharing and strategy. Membership enabled to foreigners is an innovation created by
Isn’t a microloan too expensive for poor people?
The alternative options of financing services available to the poor are usually offered at much higher cost than those offered by MFIs. The provision of financial services to the poor entails significant operational costs reflected in the interest rate charged. That is also one of the main reasons why traditional banks do not make small loans. The poor are able to pay the interest rates because they operate their businesses in markets with limited competition, allowing for high margins.
Why are interest rates in developing countries so much higher than in the developed world?
Cost of capital reflects the risk level and the profitability. In developing countries, state, legal, political and market infrastructures are less developed, inducing higher risks as well as higher profitability. Populist attempts to introduce interest caps led in known cases to outflow of capital and economic downturn, with negative impact on the most marginalized populations. The only method to cut the cost of capital is to build up robust institutions, spread education and increase competitiveness in all sectors.
Is it possible to lend without interest?
Yes. The end user, however, always pays interest that must cover at least all the costs associated with the loan. Also in the case of microloans funded through portals like Kiva, by the government or non-profit organizations the meaning of the interest rate is not only symbolic. 
Is it possible to donate?
Yes, in such a case all future returns on these donations including principal will be re-invested in new businesses and a so called revolving fund will be created.
Can microfinance be profitable?
Microfinance institutions that perform well are able to generate profits. After all, this is the only real way to secure the long term sustainability of microfinance: service the poor, generate profit and continue to expand. The poor do take longer to repay than customers of traditional banks; this creates a trade-off between maximizing profitability and serving the impoverished. Only those MFIs that are well run generate profit: many of the current MFIs operate in red numbers.
Interesting TED talk on profitable NGOs.
Is it possible to lend/donate as a company?
Yes, this can bring publicity for your company on homepage with the only cost the interest that you give up on invested loan. For more information regarding the incorporation of microfinance or microguarantees to your CSR strategy write to us to This email address is being protected from spambots. You need JavaScript enabled to view it..

Which fees are associated with lending through
No fees. collects loans from individuals and sends them to its partners approximately twice a month. The pooling mechanism reduces transaction costs which are at the cost of and its partner organizations. Exchange rate risk is also taken over by and its partners.
When will I receive my repayment?
Since the international money transfers take some days and we reduce our transfer costs by pooling, your repayment might be approximately three weeks delayed, counted from due date specified in your contract.
Who finances the project?
The beginning of the project was financed by founding members and stakeholders of the holding company Microfinance, a.s. This company is a so-called Marketing Agent of cooperating partner organizations that remunerate it for the marketing activity.
What is the electronic signature?
An electronic signature, or e-signature, is any electronic means that indicates either that a person adopts the contents of an electronic message, or more broadly that the person who claims to have written a message is the one who wrote it (and that the message received is the one that was sent). We may compare it to a signature, which is a stylized script associated with a person. In commerce and the law, a signature on a document is an indication that the person adopts the intentions recorded in the document. Both are comparable to a seal. For more information click here.
Who is formally responsible for repayment of my financial support?
The legal representative of MFI, cooperative or individual borrower is formally responsible for the repayment of the financial support. The legal representative confirms this binding and enforceable responsibility by signing the loan agreement.
Is it safe to lend to developing countries?
Please take into account increased risks of lending to developing countries.
The security of the loan is based on the principle of diversification into portfolios of tens of intermediaries and thousands of borrowers with statistically low level of delinquency. This type of investment is suitable for stabilization and supplement of portfolios as it is an alternative asset with attractive interest and at the same time with demonstrable advantage for healthy development of world economy. The benefit is in stability coming from the independency of the local economies on the fluctuation of global economy.
What guarantees do I have?
Every loan is guaranteed by a signed contract. Higher amounts are usually guaranteed by promissory note signed by the legal representative, in case of MFI and cooperative, or by individual borrower. The particular conditions differ depending on the chosen project and amount lent
What happens if the business fails to repay the loan?
In case of default has a very limited potential for collection. Our allied lawyers usually start from higher amounts of debt and charge 20-30% of the collected amount. We recommend to start with regular lending of slowly increasing amounts rather than big amounts.

Can I get in touch with the supported entrepreneurs? 
If you want to know more about our partners, write to us to This email address is being protected from spambots. You need JavaScript enabled to view it..
If you are a cooperative member, you can participate in the general meeting. Participation in the general meeting thus becomes an interesting tourist opportunity and cultural endeavour.
I cannot log in, I cannot register, I did not receive copy of the contract in my e-mail etc.
In case of any technical problem, please contact us at This email address is being protected from spambots. You need JavaScript enabled to view it..
Tax notification
Please note that in most countries the interest income is subjected to taxation. It is in the investor’s own interest to properly tax interest income according to the relevant national and international acts and agreements. is not responsible in any way for due clearance of the income tax of lenders nor the ones of microfinancial institutions.


Microfinance, a.s. Seifertova 615/65 130 00 Prague 3 Czech Republic

This email address is being protected from spambots. You need JavaScript enabled to view it.  Tel.: +420 212 245 787*

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Data box: r42e7km EET: A1675669

Identification number: 278 60 965


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The service provider of the portal my Electronic Loan Exchange Network ( is a joint-stock

company Microfinance,a.s. registered at the Czech company register kept  by City court in Prague,

section B, inset 11586.


CZK account for public: 2800379150  Bank: Fio Banka a.s. Bank code: 2010  IBAN: CZ8520100000002800379150  SWIFT: FIOBCZPPXXX

CZK non-public account for suppliers: 2600379148  Bank: Fio Banka a.s.  Bank code: 2010 IBAN: CZ5120100000002600379148  SWIFT: FIOBCZPPXXX

EUR account for public: 2300379162  Bank: Fio Banka a.s. Bank code: 2010 IBAN: CZ2620100000002300379162 SWIFT: FIOBCZPPXXX

USD account for public - Fio Bank: 2500591053  Bank: Fio Banka a.s. Bank code: 2010 IBAN: CZ2020100000002500591053 SWIFT: FIOBCZPPXXX 

 GBP account for public: Bank: Fio Banka a.s. Bank code: 2010 Account No. - GBP: 2300591059 IBAN: CZ6120100000002300591059



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