The difference between $100 million in financing to a corporation and a $100 microloan to an African street vendor? The entrepreneur could pay as much as eight percentage points more in interest--even if he's as certain to repay as Big Biz. That's because there has been no cost-effective way to analyze the credit risk of smaller loans. But Sylvain Raynes and Ann Rutledge have an answer. Working with the Omidyar Network and others, their R&R Consulting is applying high-powered computer modeling to produce the first grassroots-level risk analysis of a microfinance loan pool. (They're also assessing risks for independent filmmakers and a thoroughbred breeder.) The result: Better deals for the little guys. "We're trying to erase the imaginary boundary," Rutledge says, "between socially positive enterprise and projects that make money."
Correction: R&R Consulting is not working directly with Omidyar Network on a grassroots-level risk analysis. Rather, Omidyar is funding R&R's partner in the research.