Entrepreneurs with financial capital constraints

Typically, people with little or unstable income cannot receive loans or other services from banks, as poorer people typically have fewer or no assets at all that can be secured by a bank as collateral. Because of these difficulties, when poor people borrow they often rely on relatives or local moneylenders, whose interest rates can be very high.

From the Franciscan monks who founded community-oriented pawnshops in the 15th century, to the founders of the microcredit movement in the 1970s (such as Muhammad Yunus) - over the past centuries different practices and theories have been designed to provide credit to the poor. Microfinance tries to build a platform upon which donations are used to help those in need in a manner that helps them help themselves. Microloans must be repaid by the borrower and therefore incentivize the creditor to use the loan wisely and efficiently.

Recently, the microfinance industry has been subject to criticism: It started out mainly as the work of non-profit organizations, where small loans to start up entrepreneurs were given to help them in their struggle out of poverty. In some areas, there has been a drift away from this starting principle, and it is reported that these organizations seek high interest rates on their loans in order to pay back the debt based on which their loans were financed, and at the same time meet overhead costs. These interest rates led to windfall profits for these organizations and may push the borrower deeper into debt.

In light of these discussions, no mountain too high diligently selects its microfinance partners through several key selection criteria to ensure funds are properly administered and not used in ways to take advantage of borrowers. no mountain too high is adamant about contributing only to those microfinance organizations that do not charge unfair interest rates and can at the same time set the right incentives for the micro-entrepreneur. This is why we currently only work with Akhuwat, an interest-free microfinance organization in Pakistan that we have personally visited and know well. 

Entrepreneurs with human capital constraints

Capital alone will often not be enough for micro-entrepreneurs to succeed. Human capital, or the skills that make a person more productive and efficient in the labor market, are frequently a constraining factor for the poor. In South Asia, it is expected that it will take almost three decades for the region to catch up to current levels of human capital in industrialized countries. For women in this region, it is expected to take even longer. Through education, knowledge, applied skills and building community networks, these people can increase their skills and stand a better chance to succeed in their entrepreneurial ventures.

Through its own network, partners and personal experiences, no mountain too high strives to match micro-entrepreneurs with serial entrepreneurs, capital with potential, and experienced specialists with excited apprentices. Economic growth happens not only when both financial and human capital is available, but also when it is effectively utilized in an economy. Promoting and supporting the realization of entrepreneurial ideas are therefore a key consideration in our supporting efforts. In light of this, we have begun a partnership with the Pakistan Innovation Network.