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| Below you will find answers to our most frequently asked questions regarding lending, the LFP structure and the security measures in place to keep our organization transparent and efficient. If you have any more questions or concerns contact us at info@LendforPeace.org |
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| What is LendforPeace.org? |
| LendforPeace.org is a not-for-profit internet platform that allows individuals like you to make small loans to specific micro-entrepreneurs in the West Bank. Our mission is to use micro-lending to promote economic opportunity and political stability in the Middle East.
Using our site, you can make a loan directly to a vetted micro-entrepreneur in the Palestinian territories. We work with US government approved microfinance institutions on the ground to deliver your capital along with training and guidance to low-income individuals who are interested in starting or expanding their own small businesses. |
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| Will my loan go towards operational expenditures? |
| No. LendforPeace.org supports its operations through supplemental donations from users like you. If you make a $25 loan on our platform, every cent of your donation will go to the micro-entrepreneur of your choice.
If you would like to donate to LendforPeace.org, click on the \"Donate\" link in the footer of this page. |
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| What happens if a borrower defaults? |
| Our partners conduct extensive due diligence on borrowers before lending in order to minimize the risk of default. While these methodologies have resulted in very high repayment rates in the past, LendforPeace.org cannot guarantee repayment in the case of default. |
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| What is the Revolving Microfinance Fund? |
| By donating your loan to our revolving microfinance fund, you ensure that your money is re-loaned as efficiently as possible over and over again. Rather than having your money wait for you to re-loan it as credit in your account, we will automatically re-loan it for you, wasting no time and reducing our overhead. Your contribution to the revolving microfinance fund is tax deductible in the US. |
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| How do our local partners use your funds? |
| Our local partners pass 100% of the funds raised through LendforPeace.org on to your entrepreneur. They also perform vital services including performing due diligence on each borrower, disbursal and collection of funds, and providing entrepreneur support services throughout the life of your loan.
For example, Asala is renowned in the Palestinian microfinance sector for the business training workshops that they provide for their entrepreneurs. Our local partners cover the costs of these services by charging modest interest rates to borrowes. |
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| How and when do I get my money back? |
| Every entrepreneur has a loan profile which contains the term of the loan (ex. 6 months, 12 months, etc). Most loans will be repaid by the entrepreneur to the local partner institution in monthly installments. Once your loan is repaid in full, our local partners return the capital to LendforPeace.org. We immediately credit your money into your account where you may choose to withdraw your funds or lend to another worthy entrepreneur. |
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| Is this a donation or a loan? Is it tax deductible? |
| When you make a standard loan, you can expect to have your capital returned to you if and when your entrepreneur repays their loan to our local partners. Historical repayment rates for these types of loans are high, as high as 98%. Because you have the ability to get you money back, standard loans are not tax-deductible.
If, however, you choose to make a revolving loan, you have in essence donated your capital to a fund that will continue to lend your capital in perpetuity. Since this is a donation, the entirety of your revolving loan is tax deductible.
Additionally, any donations made to LendforPeace.org on a standalone basis or in conjunction with a standard or revolving loan are tax deductible.
Note: \"Tax deductible\" should be taken to mean tax deductible in the USA. |
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| How safe is LendforPeace.org? |
| LendforPeace.org acts as a carefully monitored and transparent infrastructure to deliver you capital to the right entrepreneurs. All of our local microfinance partners work with and have been vetted by USAID (the US Government\'s aid organization). They also comply with the US State Department’s anti‐terrorism clause. Our partners are regularly audited by international brand name accounting firms like PricewaterhouseCoopers and Ernst & Young to ensure responsible financial practices.
Our local partners perform extensive due diligence on each lender and each loan is matched by our local partners or covered by a risk-sharing agreement so that our partners have aligned incentives with the users on our site. Before granting a loan, our partners rigorously research each potential borrower. Loan officers examine everything from local reputation to sources of income and criminal records. These same loan officers regularly visit each entrepreneur in the field to ensure that loans are being put to use properly. LendforPeace.org also sends its own personnel periodically to audit partner portfolios and to perform site visits with current and prospective borrowers. |
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