UMDA - Micro Equity Development Fund

About Micro Equity Development Fund (MEDF)

The Micro Equity Development Fund is a for-profit firm that capitalizes established small-companies in developing countries. The current microloan model does not allow entrepreneurs in developing countries the freedom they may require to rapidly grow their business. Typically, a microloan repayments start on day one – thus entrepreneurs are not thinking about how to best use their capital to grow their business, but rather how to pay back their loan. Instead of loan, we offer capital to businesses with consistent and growing cash flows in exchange for a share of equity. This way, the investor and entrepreneur both have an interest in the continued growth of the company. We have been exclusively licensed by The Micro Equity Development Fund ( MEDF ) to promote the model in India.

What We do

We provide entrepreneurs across the country access to investment capital in order to scale their business from a micro-venture to a medium-sized enterprise. The Fund will also provide middle-income investors in the country with an opportunity to directly invest in small businesses in emerging economies. Together, these micro-entrepreneurs and socially-conscious middle-class investors can begin to fill the so-called "missing middle" in developing economies, resulting in more profitable businesses for the poor and the potential to earn a reasonable return for the investor.

How it works

We select the Entrepreneurs eligible for Equity support, assess their financial needs, study the background of the business and stakeholders, make due diligence and explore potential investors. We act as a platform for both Investors and Entrepreneurs .We ensure the assured return to Investors who invest in the business through us. Entrepreneurs report to us as per the policy with financial data on timely manner and hence we keep a close look over activity on invested fund. The investors' stake in the company is protected through several mechanisms.

How?

First, through our company, the investor actually has rights to the assets of the company in case the company happens to go bankrupt.
Second, the entrepreneur has an incentive to report to our company financial data in an accurate and timely manner, because we also control the loans that the entrepreneur receives. The entrepreneur is incentivized to report good data in order to protect their reputation and credit history with us.
Third, in the rare case that there ever needs to be legal recourse in order to repay an investor, we on the ground are prepared to take measures to protect our investor's capital.
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