Zero-Kap is a named fund under FEMI. The fund provides credit to people in developing countries who are in structural poverty and have ideas and plans to break the cycle of poverty. Zero-Kap offers them access to financial resources to which they do not (yet) have access.
In providing credit, Zero-Kap focuses on groups of people, who are organized in associations, cooperatives and other contexts where decision-making takes place collectively as much as possible. Also, they must not be able to obtain financing in any other way.
A typical Zero-Kap credit averages at 25,000 euros. What matters to Zero-Kap is not so much the size of the project, but the small scale, the direct effect on employment and living conditions.
Zero-Kap is a fund with a small, expert project committee and a larger group of expert volunteer advisors. A loan application is carefully prepared by one of the advisors.
The application is evaluated using a scoring methodology, weighing the business plan, socioeconomic impact, risks of success and repayment.
After a positive recommendation by the advisor to the project committee, the project committee decides whether to grant a loan.
After the loan is granted, a local monitor maintains frequent contact with the borrowers on behalf of Zero-Kap about the progress of the project. In addition, the Zero-Kap project advisor remains closely involved in the project as a liaison.
If your project seems to meet the criteria and procedure below, please use the form below to apply. The Zero-Kap project committee will then consider the application.
- The credit benefits organized groups of disadvantaged people with a high degree of self-governance.
- The applicant, possibly an intermediary organization, must have a well-founded business plan, showing that opportunities are high and risks are manageable and the socioeconomic situation of the participants improves sustainably.
- The credit promotes employment and thus increases people’s income.
- The recipient of Zero-Kap credit cannot obtain (affordable) credit in any other way.
- A guarantee of repayment is expressly desired.
- An independent monitor on site is a requirement. The monitor monitors the project on the basis of the approved proposal and also reports on progress.
- The loan is applied for in a country and region where Femi is already operating.
A Zero-Kap loan has the following features:
The loan runs in either local currency or euros. In the case of euros, Zero-Kap does not charge interest; in the case of a local currency, interest is charged (up to 15%) to cover the currency risk.
The loan runs for a maximum of five years, excluding any grace period.
The loan principal has a value of up to €50,000.
Monitor costs fall locally to the applicant.
This is a loan and not a gift; the loan must be repaid.
There must be a real possibility of repayment in the applicant’s country (so no countries where this is excluded).