United Prosperity is a
not-for-profit
A nonprofit organization (NPO) or non-profit organisation, also known as a non-business entity, not-for-profit organization, or nonprofit institution, is a legal entity organized and operated for a collective, public or social benefit, in co ...
Web-based
microcredit
:''This article is specific to small loans, often provided in a pooled manner. For direct payments to individuals for specific projects, see Micropatronage. For financial services to the poor, see Microfinance. For small payments, see Micropayme ...
organisation.
Unlike most
microcredit
:''This article is specific to small loans, often provided in a pooled manner. For direct payments to individuals for specific projects, see Micropatronage. For financial services to the poor, see Microfinance. For small payments, see Micropayme ...
or
person-to-person lending
Peer-to-peer lending, also abbreviated as P2P lending, is the practice of lending money to individuals or businesses through online services that match lenders with borrowers. Peer-to-peer lending companies often offer their services online, and ...
organisations, United Prosperity does not directly lend to the micro-entrepreneur, but instead the micro-loans are used to provide a
guarantee to a local
bank
A bank is a financial institution that accepts deposits from the public and creates a demand deposit while simultaneously making loans. Lending activities can be directly performed by the bank or indirectly through capital markets.
Because ...
, which lends to the micro-entrepreneur. Typically the local bank will lend about twice the amount provided by the micro-lender's guarantee, thus providing greater
leverage
Leverage or leveraged may refer to:
*Leverage (mechanics), mechanical advantage achieved by using a lever
* ''Leverage'' (album), a 2012 album by Lyriel
*Leverage (dance), a type of dance connection
*Leverage (finance), using given resources to ...
than traditional
micro-credit.
Another claimed benefit of this approach is that the micro-entrepreneur develops a relationship and, most importantly, a
credit history with their local bank, enabling the micro-entrepreneur to become independent of the micro-lenders in the long term. A criticism of traditional
microcredit
:''This article is specific to small loans, often provided in a pooled manner. For direct payments to individuals for specific projects, see Micropatronage. For financial services to the poor, see Microfinance. For small payments, see Micropayme ...
models is that they can create a long-term
dependency between the micro-lenders and the micro-entrepreneur as the micro-entrepreneur never builds a relationship with local banks.
As of mid-2022, the unitedprosperity.org domain name is up for sale.
References
External links
Official Website
{{DEFAULTSORT:United Prosperity (Organisation)
Microfinance organizations
Peer-to-peer charities
Peer-to-peer lending companies