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.