Eric Fuller and the WhatBox Foundation will research and develop a mechanism to bind micro-insurance to microcredit both at the individual loan level and as part of a securitization. The micro-insurance component should be blended with a shift of philanthropic capital from the lending funds into a pool to help offset defaults thus allowing the public capital markets to be utilized to create the funding for microcredit lenders. In addition, reporting and accounting protocol needs to be standardized so that there is consistency of data regarding repayment and defaults among the various microcredit lenders who receive funding through this project.
An insurance partner will insure microcredit loans against default by taking a very small portion of the payment stream from each loan. The investment bank should be able to create and sell debt instruments, which are repaid by the payment stream of these insured micro-loans.
Inspired by a speech given by President Clinton to alumni of Georgetown University in which he described the goals of the CGI, Mr. Fuller attended the 2006 Annual Meeting and decided to bring his own creative deal making skills to facilitating capital formation for micro-credit lenders. Mr. Fuller has been working to develop the strategy for aggregating capital to fund micro-credit lending globally. He has met with a number of significant people and entities whose cooperation will facilitate this commitment.
An investment bank and insurance partner are needed to complete this commitment. The insurance partner should be able to insure micro-credit loans against default by taking a very small portion of the payment stream from each loan. The investment bank should be able to create and sell debt instruments, which are repaid by the payment stream of these insured micro-loans.