The 98% Borrowers
What microfinance teaches mainstream finance about risk, trust and capital allocation
Hi all 👋
You know how much I love taking you down unexpected paths. This week, I’m taking you into an exceptional entrepreneurial adventure and a profoundly human one. I am deeply admiring of the courage and tenacity of this woman who carries, with her teams, a project full of meaning.
Finance rarely gets good press. It is criticised for its opacity, its indifference to the human. Here, I see the opposite : a finance that deliberately puts itself at the service of the most vulnerable to open a path toward a better life. This is the subject of my conversation with Armelle Renaudin, co-founder of Entrepreneurs du Monde.
Enjoy reading and listening :)
The quiet power of patient capital
There is a category of economic actors that rarely makes the front pages of financial newspapers, probably because their logic does not fit neatly into the dominant narratives of finance. They operate at the intersection of public policy and private generosity. And they may be doing what traditional finance does not always do well : reaching the people who need capital most, sustainably.
I have had the opportunity to cover this topic (too rarely for my taste) with episodes featuring the European Investment Bank and the World Bank and at a smaller scale with actors like FinFrog, whose founder Riadh Alimi came to present his model. What Entrepreneurs du Monde does is different : building the entire chain, from scratch, in some of the most fragile contexts on the planet.
The common thread across all these models is the same conviction :
Entrepreneurship is not a lifestyle choice reserved for those with the right networks, education and safety nets. It is, for hundreds of millions of people, the only viable path to economic existence. And financial institutions that truly understand this are the ones that define their capital structures accordingly.
A financing architecture that finance should study
The model Entrepreneurs du Monde has built over nearly thirty years is worth examining closely.
A genuine case study.
It operates across distinct incubation phases, each matched to the development stage of the social enterprise being supported and each financed differently.
In the earliest phases (feasibility study), grants from Entrepreneurs du Monde cover the operating budget entirely. This is pure risk capital : no return expected, no collateral required. It is the layer that makes everything else possible.
As the enterprise enters its development and growth phase (typically 6 to 8 years) the working capital is financed by a dedicated structure drawing on individual and institutional loans. We are talking about a portfolio of 80 million EUR, 250’000 borrowers and 90% female borrowers.
In the final phase (scaling), Entrepreneurs du Monde steps back from direct financing. Inbestisseurs Solidaires takes equity stakes in the enterprises. Its investors accept below-market returns in exchange for measurable, audited impact.
The overall ecosystem reaches more than 370’000 families per year (2.2 million direct and indirect beneficiaries) across 19 social enterprises in 13 countries.
The lender base is not marginal. Amundi, Mirova, Fondation Caritas, AfD, La NEF. These are mainstream financial institutions making a deliberate allocation toward this model.
When I tell you the repayment rate is 98% - on unsecured loans, to the most financially excluded populations, in contexts of political instability, climate shocks and zero formal safety nets.
No risk model in conventional finance would predict that. And yet it holds, certainly because the model is built on proximity, accompaniment and trust, not on credit scoring.
Without overlooking the known limitations of microfinance and patient capital (sometimes risk of poorly managed over-indebtedness, difficulty scaling,…), this model nonetheless demonstrates that a different way of allocating capital is possible.
The question this raises for those of us working in traditional finance :
What assumptions about risk, collateral and borrower behaviour are we encoding into our models that systematically exclude people who are, in practice, more reliable than we think ?
What survival entrepreneurship teaches us about our own
Strip away the ecosystem. Remove the accelerator, the pitch deck, the cap table, the LinkedIn announcement. What remains ?
There is a concept worth rehabilitating here : frugality. In Western entrepreneurial culture, frugality has become either a virtuous posture or a temporary constraint to be overcome as soon as the next funding round closes. In the contexts we are discussing, it is something else entirely. More like the discipline of allocating scarce resources with precision.
There is also something to examine in the relationship between necessity and clarity of intention. One of the most persistent problems in Western entrepreneurship is what might be called mission drift : the gradual distance between the founding intention and the day2day decisions of a growing organisation. I return to this question of purpose constantly with my clients.
The original question : “what problem are we actually solving, for whom and why does it matter ?” gets buried under complexity, funding pressures and organisational growth.
For entrepreneurs who cannot afford to lose sight of the concrete outcome of their work (survival itself) this drift is impossible. The purpose is never abstract, it is the next meal.
Finally, there is the power of the collective. What Entrepreneurs du Monde builds around its beneficiaries is identical to what the best founder communities try to recreate in clubs or masterminds. The difference is that here, it is not “good to have” networking.
The mirror
Our ecosystem loves the word “Mission Driven”. It appears in decks, impact reports and keynotes. It has become, in many contexts, a positioning tool- a way of signalling values without necessarily being constrained by them.
What Entrepreneurs du Monde and the women it supports offer is a radically different definition. Mission driven as an operating condition.
This is not an argument against ambition, growth or financial return. It is an argument for honesty about what anchors a project when the environment becomes unstable.
Intention is what holds everything else together.
The question I leave you with today :
In your organisation, if you removed the deck, the brand or the narrative, what would remain as the actual reason you do what you do ? And is that reason solid enough to hold when the environment stops being favourable ?