Microcredit innovation
The Bonus method is an innovation that doubles the impact of micro credit, local investments, (welfare) grants and any other money flowing to a community.
Bonus tested with a grant
STRO has tested the Bonus method in Fortaleza (North-Brazil) in a pilot-project. In this project, instead of using a grant from a donor to build a school in a conventional way (use the money to pay for the building-project), 88% of the money was substituted by local currency. The money was used to give loans to local enterprises in national currency that were repayable in local currency. At the same time, the constructors and suppliers of the school were paid in local currency, which they could spend at the enterprises that had the loans and others that also accepted the local currency. The project ended when all loans were repaid.
Evaluation from the University of Bahía showed that the project resulted in an extra economic activity of 87%. This is in comparison with a project where the money was spend directly, without calculating the impact of the emitted credits, which are of course also an extra impulse, because in a conventional spending of the money these credits would not have existed.
Bonus explained in Flash animation
If you want to see a Flash animation explaining the functioning of the Bonus method please click here.
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