(2004-04-12) Khosla Micro Lending

Vinod Khosla is getting involved in MicroLending. "They have sophisticated credit algorithms (Model)," he said. "Does the woman own a buffalo? Some chickens? Does she have a toilet in her home? What kind of roofing material does her home have? Does she bring a shawl to the village meeting?".. An estimated 3,000 microfinance initiatives serve the world's poor but a scarcity of money has limited their expansion. More than 70 percent of them serve fewer than 2,500 borrowers each. Only 30 microfinance initiatives have grown to serve more than 100,000 poor borrowers. The majority of the microfinance initiatives struggle to find grant financing and to stay in business. The money they do receive is often in small grants of $5,000 to $50,000. The ventures are typically viewed as risky propositions for loans from commercial banks.