Seedrs is much closer to Finobra conceptually. There are no loans, only equity. The close participation model is the same as well. Investors fund businesses with the expectation of profit. Entrepreneurs benefit from consulting services similar to Finobra’s. The differences are in what kind of entrepreneurs are funded, and FInobra’s much closer management of the startups. Finobra’s entrepreneurs are all over the world, initially in Peru. The size of the startups would typically be much smaller as well.


I don’t mean to knock Kiva, but it is not what Finobra wanted to do in significant ways. Kiva relies on donations for its own survival; only Finobra’s NGO, Khallma, received donations, and only as another source of funding for projects. Kiva used intermediaries that charged the borrower interest, sometimes at very high rates; Finobra used an equity model instead, and Finobra S.A. provided all business services as an intermediary. ¬†And finally, Kiva lenders received no profit or interest, only the unreliable return of principal. Although it has been successful and it is hard to argue with success, I can’t understand why lenders would do this and can’t imagine this model working long term. How long will lenders remain active, driven by a sense of community and philanthropy?


Kiva appeared in 2005, after Finobra began. Kiva collects individual lender money and uses microfinance intermediaries to disburse and collect funds. Intermediaries collect interest, sometimes exorbitant, to defray costs. Kickstarter began in 2009. Investors in both cases do not profit from backing projects. Seedrs, a European company, does equity crowdfunding more like Finobra’s concept, with the exception that Finobra functioned as curator and managing intermediary.

Alternate forms of finance have been around even earlier. Today there are more than 2000 crowdfunding websites. This suggests that many view crowdsourcing as an Internet business opportunity. Finobra was created with a different purpose. My next post will elaborate…


The idea for Finobra started while I was working at the World Bank in Washington, DC. I thought there was a place for a small business that did similar work at just a different scale. The lack of available capital investment for small business entrepreneurs, especially in developing countries, was a concern I wanted to address.

At the other end of the investment relationship, investors had a very detached connection to the companies they invested in. Most small investors are not able to get close to their investments. When focusing on returns only, it makes sense when investing relatively small amounts of money to buy index or mutual funds. They learn the lessons of diversification and the poor performance of actively managed funds. This is a very reasonable behavior adaptation given the modern stock market environment. But then the sense of ownership and participation in the investments is lost. Most investors have no idea what they actually own. This is another concern I wanted to address.