The Cooperation Model

The GLS Bank cooperates with the MFIs. The MFIs are responsible for client acquisition, credit analysis and monitoring. The advantages of this model are:

• The existing support structures for start-ups and small enterprises in Germany can be used, i.e. ministries, associations, institutions that promote trade and industry as well as cooperatives.
• The MFI works closely with its respective target group and can develop a range of loan products (without a banking license) tailor-made for its clients. In this way clients can be served who wouldn’t be served with standard products.

In line with this cooperation model the GLS Bank offeres the MFIs the following:

• a so called “gratification” which is calculated on basis of the repaid loan portfolio minus the yearly loss rate
• a fee per loan contract of currently 800 EUR which is meant to support the business model of each MFI (the fee will be decreasing throughout the next years)
• web-based platform for loan disbursement and monitoring of microloans
• flagship MFIs: the MFIs with the best microfinance model are specially supported
• best-practice sharing of successfully operating MFIs.