Are we a Social Business ?
The goal of many existing companies is largely profit maximising alone. We at BMF have the interest of the merchants at its core. Limited personal goal is not the sole driver of this company but merchant development and fuelling aspirations of many merchants to become successful entrepreneurs certainly is what drives us.To most business the idea of business with objectives other than profits has no place in the existing theology of capitalism. Surely capitalism is amenable to improvements and we recognise this, however creating a business that address a social cause is equally important. Therefore our organisation is basically same as any existing business but it differs in its objectives. Our business celebrates the entrepreneur in every merchant and strives to support every merchant to be a successful business, flourish in the market, employing workers and making a positive change to economy, employment and thereby touching many lives.
We are cause driven along with being profit driven and believe we can act as a change agent for the world. However by definition we are not a social business.
Are we then a Hybrid between regular business and social business?
A regular business is profit maximising and earns dividend for investors who invest in it. A social business may be defined as non-loss, non-dividend business. The profit that it earns does not go to the investor. The surplus generated by the social business is usually reinvested in the business and ultimately passed on to the target group of beneficiaries in such form as lower price, better service and greater accessibility.However in our case the beneficiaries are merchants and we are celebrating entrepreneurship. Over a period of time we want more and more merchant to own BMF. This will creates a true risk and reward model to investors who over the period will be none other than merchants themselves. When dividends are offered to investors (merchants) the wealth created is going back to the same target group i.e. Merchants.
Therefore by definition our business in not a social business, nor is it a regular profit making business. It is not a hybrid because we do not split equity between profit making and social cause. What is it? It is simply a regular business with an objective "Of the merchant, for the merchant, by the merchant"
Business Microfinance is the provision of financial services to small business, including new business and the self-employed which traditionally lack access to banking and related services. More broadly, it is a movement whose object is "A world in which as many small business and financial distressed business as possible have permanent access to an appropriate range of high quality financial services.
We at Business Microfinance believe that such access will help small business out of difficulties, help them consolidate and address their business challenges. Finally make them better business that can complete with large and organised business.
We typically advance one month of merchant's turnover or card processing volume. The amount can be as small as $2500 or can go up-to $100,000.
Phase One: Target Segment for Business Microfinance
Merchant that has a turnover below $100,000 per month.We believe that a merchant has moved out of Business Microfinance target segment if they are doing more than $1 million in turnover or over $100,000 in net margins. We do not fund a merchant who is making more than $100,000 in net margins or turnover above $1 million. We encourage them to go to banks for their further requirements or try out our loan product. This is because we want our money to help striving business and we want to remain invested in merchants that find it difficult to raise money from the banks or traditionally lending sources.
Three phases of drilling deep.
We will take a top down approach while funding merchants.- In Phase one starts with business below $100,000 but above $3500 per month turnover.
- Phase two will see us fund merchants in the range of $3500 to $350 per month turnover.
- In the final Phase will see us funding merchants below $350per month turnover.
