1. 1x1Microcredit is a non-profit organization that provides microloans to support people living in poverty through local partners. It offers capital at 0% interest to local microfinance institutions. 2. The proposal is for Fundación Paraguaya to become a local partner, allowing it to access capital from 1x1Microcredit to finance microloans. Capital would be provided in Euros at 0% interest with a 6% fee per loan. 3. As a local partner, Fundación Paraguaya would be responsible for managing the loans, including disbursement and repayment. It would also help monitor impact and report outcomes to 1x1Microcredit.

1. Partnership proposal for:
FUNDACIÓN PARAGUAYA
PRESENTATION | FEBRUARY 2013

2. EXECUTIVE SUMMARY
1x1MICROCREDIT
1x1Microcredit (1x1M) is a non-profit organisation seeking to support
people on their way out of poverty. It has created a web-based solution
offering the possibility to social lenders to lend money to people living in
poverty.
Social investors lending through 1x1M do not expect a financial return to
their investment, and therefore 1x1M offers very cheap capital to finance
or re-finance loans to microfinance institutions serving people living in
poverty.
LOCAL PARTNERS
1x1M operates through partnership agreements with well-selected
microfinance institutions. Our local partners share the mission of fighting
poverty, and offer effective microfinance services to clients living in
poverty. They promote entrepreneurship in people who are financially
excluded to promote employment, resilience and gender equity, as
essential elements for achieving sustainable livelihoods.
Local partners upload on our web site the demands of microcredits of
some of their clients in order to raise the necessary capital.
PROPOSAL TO FUNDACIÓN PARAGUAYA (FP)
• FP would become a local partner to be able to publish its demands for
microcredit and access non-profit capital to finance them.
• Capital offered in Euro with 0% interest rate.
• Fee for service every loan: 6% of annual interest pro-rated, with a
minimum of 2%.
• FP would be responsible for defaults and for F/X risk up to 40%. For a
depreciation >40%, 1x1M would cover the loss.
• Low reporting costs: Exception based reporting system and automatic
monthly net billing.
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3. THE ORGANISATION: 1X1MICROCREDIT
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4. OBJECTIVES
SUPPORT
people in their efforts to
escape poverty. It is only
through their full
participation that real
progress can be achieved
and sustained.
We believe that
poor people are
part of the solution
to poverty.
SUSTAINABLE
LIVELIHOODS
Our main objective is to
promote sustainable
livelihoods. This requires
boosting employment,
strengthening resilience and
fostering gender equity.
INCLUSIVE
MICROFINANCE
Quality microfinance
services are needed to
support people on their
way out of poverty.
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5. • Transaction costs makes for-profit capital focus on small and medium enterprises in the South, but it
does not reach the poorest. It is often too expensive to (a) reach people living in poverty in rural areas
that are not populated, and (b) to lend small amounts for short periods.
• Aggressive offer of microcredit demanded by for-profit capital: aggressive efforts to place for-profit capital
that expect returns often generate a dynamic of over-indebtedness, preventing the poor from escaping
poverty.
• Non-profit capital, combined with tools such as self-funded groups and savings schemes, promotion of
entrepreneurship, vocational training and financial education, as well as support in planning can make
microfinance a powerful force to fight poverty.
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WHY PROMOTING ACCESS TO
NON-PROFIT CAPITAL

6. HOW DOES IT
WORK?
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1x1Microcredit has created a simple web-based platform offering the possibility to
social lenders to lend money to people living in poverty and who have a viable plan to
improve their living conditions.

7. OUR LOCAL
PARTNERS
RECEIVING AND
EVALUATING DEMAND
Our local partners operate
close to people in poverty, in
order to provide them with
appropriate financial
services.
UPLOAD THE LOANS
Local partners upload viable
loans in 1x1microcredit.org
when they require non-profit
capital. This includes writing
the story of the entrepreneur
and its project and publishing
a picture.
MANAGE LOANS
Local partners manage the
disbursement and
repayment of loans, and
accompany their clients in
their projects.
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8. OUR REQUIREMENTS
Share the mission to fight poverty and to support the most vulnerable population;
Have a history (at least 2 years) of lending to poor, excluded, and/or vulnerable people for the purpose of
alleviating poverty or reducing vulnerability;
Be able to accept and repay in Euros from and to abroad and ability to accept/manage currency risk;
Provide with legal incorporation registration documents recognized by the government;
Ability of one staff member to communicate by phone and email in English, Spanish or French;
Have internet connection and the ability and permission to digitally photograph clients;
Have at least one year of externally audited financial statements;
Have the capacity and permission to present and share all data of its clients through 1x1M’s web site;
Serve at least 1,000 active borrowers with microfinance services.
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9. TYPES OF LOANS
GROUP OR INDIVIDUAL
1x1Microcredit accepts loan
demands from individual or
groups. Loans can be given to
men and women, but we
value that our local partners
give priority to female clients
and groups.
ENTREPRENEURSHIP +
Most loans should support
entrepreneurial activities that would
allow clients to increase their income
and financial stability. However,
1x1M also accepts loans that would
improve a client’s resilience,
including loans to improve living
conditions, vocational training or
health emergencies.
AMOUNT AND DURATION
Amounts should always be
multiples of 25€ and could be of
100€ up to €5.000. Duration of
minimum 2 months and maximum
of 12 months.
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10. THE FOUNDERS
Laia Oto Llorens
Laia is an economist with intense professional
experience in finance. She has worked in banking
industry when working for La Caixa, and in the audit
business at Arthur Andersen. She also worked for the
United Nations Development Programme’s project titled
Technological Information Promotion System (TIPS),
based in Rome, as finance manager. She has also
worked for the Society for International Development
managing finance and events. She created her own
start-up in the U.K. before moving to Spain to create
1x1Microcredit.
laia@1x1microcredit.org
Miquel de Paladella
Miquel is an economist with a career of 20 years
working in development. He has worked for international
NGO such as the Society for International Development,
Plan International and Ashoka, and for UN agencies like
UNICEF. He is the co-founder of UpSocial and leads its
initiative “Social innovation for Communities”,
investigating powerful proven social innovations and
facilitating their implementation in other countries.
miquel@1x1microcredit.org
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11. HONORARY COMMITTEE
Enrique Iglesias,
Uruguay,
Iberoamerican
Secretary and
former President of
the InterAmerican
Development Bank
Alfredo Pastor
Spain, Professor at
IESE, and former
Secretary of State
for the Economy of
Spain.
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Federico Mayor
Zaragoza
Spain, President of
the Foundation for
a Culture of Peace
and former Director
General of
UNESCO.
Nafis Sadik
Pakistan, Special
Adviser to the UN
Secretary-General
and UN Special
Envoy for HIV/AIDS
in Asia and Pacific.

12. THE PROPOSAL TO FUNDACIÓN PARAGUAYA
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13. MAIN CONDITIONS
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• Interest rate: Capital at 0% interest rate in Euros.
• Fee for service: A fee for service of 6% for every loan (per year, calculated on pro-rata basis) financed or refinanced by
social investors through 1x1M, with a minimum of fee of 2% per loan. This fee will be charged to the amount of the loan
financed by social investors, and calculated on a pro-rated basis. This fee is charged monthly upon consolidates of
accounts between 1x1M and the local partner. The fee is used to cover the transaction costs and expenses of 1x1M.
• Risks: The local partner is responsible for defaults and for managing F/X risk up to a maximum of 40%. Capital is
transferred in Euros and paid back in the same currency. For depreciations of over 40% in this period, 1x1M will
assume the loss.
• Transaction costs: 1x1M covers transaction costs of receiving funds from social investors, as well as our local bank’s
charges (Spanish) for international transfers. FP would cover the transaction costs of the recipient’s banks and its
intermediaries, if any.

14. DUE DILLIGENCE
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• 1x1Microcredit conducts reviews of financial and organizational health, its capacity to deliver financial
services to the poor, and to report back. Fundación Paraguaya must agree to facilitate these reviews when
required and allow access to its data and clients.
• It monitors the actual veracity of the stories posted on the web site, the declared interest rates and costs
associated to the loans delivered and refinanced by 1x1Microcredit, etc.
• Loans requested through the 1x1Microcredit web platform can be disbursed before or after being
published. The capital raised through the platform must always finance or re-finance the loan provided to
the entrepreneur selected.

15. IMPACT ASSESSMENT AND
COMMUNICATION
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Social investors seek to get a social return on investment. Local partners should produce
evidence of the positive or negative outcomes that its microfinance activity has actually
generated among its clients.
Local partners should therefore define a reporting plan on the outcomes of its
microfinance activity to be agreed with 1x1M, based on their own plans to measure
impact. The idea is to avoid increasing the reporting burden on our local partners.
If a local partner does not have a methodology/plan to measure the impact of its
work, 1x1M will provide with some basic tools available. In the case of FP, 1x1M will
be happy to use and communicate its impact indicators.
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16. THE PROCESS
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1. Become a Partner
• To become a 1X1Microcredit local partner, Fundación Paraguaya
(FP) must comply with the minimum requirements and agree to
the contract attached. If so, it should fill the application form and
contract attached. A response will be provided within 2 weeks
after due analysis.
• Once FP has been approved and the contract is signed by the
two parties, 1X1M would create a user profile to allow FP to
upload its corporate information. We would also send a simple
manual on how to operate. An initial credit ceiling of 5.000€ will
be put in place. This ceiling increases as the relationship evolves
and trust is consolidated.
• FP would need to nominate the people responsible for the
relationship.1x1M platform can create as many users as needed,
but for initial phases, it limits this to 3 people.
2. Upload information
• At this stage, FP would be be able to upload new entrepreneurs
and projects (loan demands) on the 1X1Microcredit intranet up to
a maximum of €5.000 in loans published.
• 1X1Microcredit reviews and validates all the uploaded demands
before publishing them on the web. Once approved, they are
immediately published to seek funding.
• The featured clients do not have to wait to have access to the
credit, if FP can anticipate the funds.
3. Receive monthly credit
• Each month, the accounts are consolidated between the 2
parties. Amount lent by 1x1M minus the repayments received by
FP are calculated and the difference is actually sent to FP or to
1x1M. The service fee of an annual 6%on every loan, calculated
on a pro-rata basis, is deducted when sending the funds.
• Monthly conciliations are transparent and can be checked by FP
at any moment via the intranet.

17. 1x1Microcredit
c/o UpSocial
Carrer de Casp 43 08010
Barcelona, Catalonia, Spain
www.1x1microcredit.org
laia@1x1microcredit.org
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