Micro-loan Proposals and Several Dimensions of Economic Development

REQUEST FOR MICRO-LOAN PROPOSALS
In the past few years, innovative and talented young people have created some clever ways to address various aspects of poverty by harnessing the power of the internet to disseminate information and connect people. The Lynne Lybbert Children’s Fund (LLCF) is interested in using to fund small but meaningful projects in developing countries that benefit specific families and/or children.
LLCF requests Micro-Loan Proposals for up to $1,000 to support promising projects showcased on the Kiva platform. Each Micro-Loan Proposal should provide the following:
1 OVERVIEW: This section should provide a clear and succinct description of the proposed project.
2 JUSTIFICATION: This section should provide a careful and detailed justification for the proposed project. Key concepts from development economics should be incorporated in the discussion of the potential of the proposed project to reduce poverty and succeed as a development intervention that benefits specific families and/or children. As part of the justification, you will provide separate information regarding the direct beneficiaries, potential spillover benefits, and overall costeffectiveness of the project (i.e., the expected impact of the project relative to its costs).
3 DEFAULT RISKS: This section should provide a discussion of the probability of repayment based on the information about the borrower and the project provided on the Kiva website. The discussion should include the specific factors that could determine whether the borrower defaults or not, as well as a possible estimate of the repayment probability.
See below for further instructions.
Micro-Loan Proposal
General Instructions: throughout this quarter you have studied several dimensions of economic development. In this assignment, you will work in teams of three on a specific project you choose from Kiva, a nonprofit organization that allows people to lend money via the Internet to low-income entrepreneurs. As explained in the call for proposals above, your team will choose a project you would like to propose to fund and will provide a justification for your choice using concepts that you learnt in class. This proposal should be written using the template provided below. Each question in this template has character limits that should be respected. We encourage you to write your answers in word first so you can count the number of characters.
1 What is the name of the project you are proposing to fund?
Alice’s Group

2 Provide the URL link to the project you are proposing to fund
/lend/2117371

3 Overview: provide a clear and succinct description of the proposed project including its location. Make sure to explain what type of loan it is (i.e. investment vs consumption). [2 points] [500 characters maximum]
Alice’s Group is located in Alego District, Kenya. Alice has five children and is the group’s representative. The group has 16 farmers. Alice’s Group needs an investment loan of $925. They want to buy cost-efficient fertilizer and maize seeds to prepare for the upcoming planting season. In 2014, Alice became a member of One Acre Fund and has benefited from it to feed her family. In reality, Alice wants to start a business from the profits of last season’s harvest.

Justification: This section should provide a careful and detailed justification for the proposed project. Key concepts from development economics should be incorporated in the discussion of the potential of the proposed project to reduce poverty and succeed as a development intervention that benefits specific families and/or children. For the next five questions, consider the total cost of the program that you propose to fund as opposed to the amount of funds that you propose to offer.
4 Direct beneficiaries I: Who are the direct beneficiaries of the program? What are the main outcomes that you would expect the project to impact?
[5 points] [1200 characters maximum]
The direct beneficiaries of the program are Alice and other group members. If the loan gets approved, 16 farmers from Alice’s Group will get enough maize seeds and fertilizers to plant 11 acres of land. Additionally, five members will get an opportunity to buy solar lights. The primary outcomes that the project will impact include eliminating hunger, poverty, and promote the training of farmers to make effective farming decisions. If Alice’s Group is funded, it will purchase maize seeds and fertilizer to plant 11 acres. In that case, during the next harvesting season, members of this group, together with their families, will get enough supply of food. They will not be hungry anymore. The sixteen farmers can use some of the produce to start businesses or educate their children. For instance, through the profits that Alice has been making over time, she is planning to start her business. That means she will have another source of income generation, which is an effective way to eradicate poverty. Moreover, group members will be trained on how to ensure they get maximum production from agricultural activities. Overall, members of Alice...