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The Gumball Fund

One mechanism through which Gumball Capital aims to further its microfinance ambitions is through a revolving loan-based system--The Gumball Fund. The Fund is established to provide a self-sustaining source of support to low-income entrepreneurs, whether he or she is a Mexican grocer trying to increase her inventory, or an Afghani farmer looking to buy more livestock.

How it works

How exactly does this work? Well, it starts with collecting all the revenue generated by your entrepreneurial activities during The Challenge. Then half of that money, in addition to all generous donations, will be given in loans to individual entrepreneurs through Kiva, a reputable non-profit 501(c)(3) organization. Kiva, working through Microfinance Institutions (MFI) worldwide, will in turn provide those loans directly to the entrepreneurs in need, in the hope of getting them started in their respective ventures and helping them to achieve financial stability. Loan recipients have about one year to repay their respective MFIs, which will in turn repay Gumball Capital, without interest.

Now to the good part! All the revenue generated in repaid loans is given out again to a brand new set of entrepreneurs. And when those loans come back, we loan it out again, and again, and again! That way the money you raise through The Gumball Challenge will forever help entrepreneurs to uplift themselves and their fellow entrepreneurs out of poverty.

What about the rest of the Money?

Now, though it is exciting that your money is going directly to help entrepreneurs through The Gumball Fund, the question of sustainability still lurks. When you've helped all the entrepreneurs that your respective MFI has to offer, what's going to happen to the hundreds of millions of people who aren't represented by any MFI?

Unfortunately, this is the main problem with microfinance. As it turns out, there is too much supply in the market, and not enough available demand. There's a wealth of funds coming in to assist low-income entrepreneurs, but there aren't enough MFIs to represent and support them. Considering that there are over 500 million entrepreneurs that still do not have access to adequate funds, this is a pretty dire issue.*

In lieu of this, we at Gumball Capital believe that the only way to sustain the long-term development of microfinance is to invest in its global infrastructure. To do this, we have committed to donate the other half of the money generated by The Gumball Challenge to Microfinance Accelerators. These organizations, such as Accion, Unitus, and the Grameen Foundation, aim to expand the reach and scope of MFIs so these organizations can better serve the entrepreneurs in need. Whether this is in the form of increasing the number of MFIs, helping existing MFIs reach self-sufficiency, or simply cover the Accelerators' overhead costs, the assistance provided by The Gumball Challenge will be invaluable to the future of microfinance.

* Data available through The United Nations Capital Development Program

Why Gumballs?

It's a metaphor for change. By placing a small amount of money in a Gumball Machine you allow a gumball to roll out. That one released gumball shifts all the remaining gumballs, moving them one step closer to the exit tunnel. Curiously enough, this is in fact, the same as microfinance.

Each developing-world entrepreneur lifted out of poverty through microfinance helps other members of his or her community by providing jobs, goods and services. The entrepreneurs' increased income also goes to better health services and education for their family, thereby breaking the intergenerational cycle of poverty. Through the Gumball Fund and Microfinance Accelerators, we at Gumball Capital believe that even with a small amount of money, we can make a lot of change.

Every gumball counts.

(trust us, we have 25,000 of them)

Microfinance!

Alleviating poverty
by providing
financial services
to the poor.
Read more...