Falk Zientz

Ashoka Fellow
Germany,
Fellow Since 2010
GLS Bank

Citation

This profile was prepared when Falk Zientz was elected to the Ashoka Fellowship in 2010.
The New Idea
Microloans have proven a key tool for the empowerment of business entrepreneurs not only in developing but also developed economies. However, more than 100,000 small entrepreneurs in Germany have no access to capital, which constitutes a powerful barrier to lifting people out of unemployment and poverty. Moreover, without adequate microfinance, developments in a great number of market innovations are severely restricted. After ten years of pioneering microfinance in Germany, Falk is unleashing new forms of capital for microenterprises through a superior model for the distribution and handling of microloans.

Falk trains local “non-banks,” mostly small business associations, to become microfinance institutes. He has found that small business associations are ideally best suited to provide the social and skills context for high repayment rates and low transaction costs. These institutes, upon being certified, handle applications and business plan reviews locally. Falk puts systems in place to process the credits for the institutes and provides financial incentives. This new model breaks the cost barrier, penetrates the niches, and creates a financially sustainable platform.

Falk has embedded this strategy with key stakeholders, thereby institutionalizing it in financial markets. At the GLS Bank, Germany’s largest alternative bank, he has created a backend platform for the efficient administration of the micro loans. A Microfinance Fund serves as guarantor with €100M in backup funding from the European Union and the German government. The German Microcredit Institute, a platform co-founded by Falk in the mid 2000s, serves as a training provider and certifier for the individual local microfinance institutes. Falk has already trained 40+ microfinance institutes (MFIs) and plans to issue 4,000 microloans annually once the platform has reached its target size. With this structure, Falk is building the first self-sustaining, distributed micro credit platform to reach critical size in Germany.

Ultimately, Falk will take the concept to other areas of finance at the intersection of public interest and private banking, empowering the financial sector to serve the needs of micro entrepreneurs in areas such as education, the environment, and many others.
The Problem
The Strategy
The Person

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