SOCIAL LOAN
sitawi's investments are made only in the form of loans?
What are the eligibility criteria for a Social Loan?
What is the difference between a donation and a Social Loan?
Can sitawi help me with other services in addition to Social Loans?

ORGANIZATION
Is sitawi a nonprofit organization?
Why does sitawi provide consulting services?
Is sitawi regulated by the Central Bank or another entity?

OPERATIONAL MODEL
How does sitawi’s Social Fund work?
Does this funding model exist in other countries?
Is there demand for Social Loans in Brazil?
What is the interest rate charged on Social Loans?
If sitawi charges interest, why doesn’t it pay back its 'investors'?
When Social Loans become a reality in the Brazilian financial system, what will happen to sitawi?
 

RELATIONSHIP WITH SITAWI 

SOCIAL LOAN

sitawi's investments are made only in the form of loans?
Yes, today, sitawi does not make capital contributions in the form of equity or convertible debt. In general, the loans have fixed interest and term, pre-agreed with the borrowing organization, according to the project funded.
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What are the eligibility criteria for a Social Loan?
sitawi takes into account the following criteria:

• Clear and recognized social impact, with a direct and relevant contribution to solving social and environmental challenges in Brazil;
• Ethical fiber of leaders and key employees of the organization;
• Ongoing operation, with clients, revenue and surplus, preferably with a history of at least 2 years;
• Structured view of the current situation of the social business and its market, enabling the development of a plan with realistic social and financial goals;
• Willingness to incorporate advice on their management model, allowing leverage the expertise of sitawi the various themes of the operation.

Currently, sitawi finances existing operations in Brazil, with relevant scale, not business in initial stages or ideas that need to be structured and developed. Business established as social enterprises will be considered only if most of the economic benefit generated is shared in the value chain and, in addition to the above conditions, do not have access to credit or support from development agencies.

Under no circumstances, sitawi makes grants or forgives the loans.
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What is the difference between a donation and a Social Loan?
There is no single standard for donations but in general, they include restrictions to cover operating costs, include a long and complex process from identification to disbursement, are smaller than needs in volume or require higher maintenance (reports, visits, etc.).

sitawi’s Social Loan does not include restrictions to cover operating costs, has a simplified procedure for obtaining and maintaining and are in volumes larger than the average donations. On the other hand, the Social Loan, just like any other loan, must be repaid. Resources must be returned to the Social Fund in the pre-agreed timeframe with the pre-agreed interest rate.
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Can sitawi help me with other services in addition to Social Loans?
In addition to Social Loans coupled with strategic advice, using unique methodology and reflecting the context of the organization, sitawi also provides consulting services to corporations, foundations and organizations seeking solutions to social impact with a business mindset.
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ORGANIZATION

Is sitawi a nonprofit organization?
Yes. sitawi is an association and has been awarded an OSCIP certificate (Public Interest Citizen Sector Organization), fitting in the Law 9.790 within the "Nonprofit experimentation of new socio-productive models and alternative production, trade, employment and credit systems" category.
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Why does sitawi provide consulting services?
sitawi believes that supporting organizations, foundations and corporations in their decision making processes, proposing a convergence between social and business mindsets, also contributes to its mission. Additionally, the challenges addressed in the Intensive Projects and Strategic Support engagements complement the training of our officers, allow the continued expansion of our view of social business and indirectly increase the resources available for Social Loans.
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Is sitawi regulated by the Central Bank or another entity?
sitawi, as an association holding OSCIP certificate status, is regulated by Justice Ministry in accordance with the Law 9.790/99. As sitawi takes no deposits (or obligations to accountholders) for donations are irrevocable, any errors of capital allocation by sitawi do not compromise the security of the financial system.
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OPERATIONAL MODEL

How does sitawi’s Social Fund work?
sitawi’s Social Fund is composed by donations from individuals, foundations and corporations. The resources are used only for Social Loans, leaving and returning after a certain time. In other words, the Fund is revolving and perennial.

Unless otherwise agreed, donations received by sitawi are fully allocated to the Social Fund, used exclusively for loans. Operating expenses are covered from the income of the fund and consultancing services to companies, foundations and organizations.
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Does this funding model exist in other countries?
Yes, the United States, the Social Loan has been around for over 25 years. More than $175 million has been lent to more than 10,000 organizations with repayment rates above 99% (at the Nonprofit Finance Fund). In the UK, there is even a bank focused on serving the social sector (Charity Bank)
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Is there demand for Social Loans in Brazil?
Yes, sitawi has constantly more demand (at the stage of negotiation of loans) than the amount available in the Social Fund. Additionally, sitawi continually feeds a list of opportunities that mature over time.
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What is the interest rate charged on Social Loans? Currently, the loans have fixed rates of ~ 1%. In the future, we will study the possibility of interest rates varying according to pre-set targets of social impact.
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If sitawi charges interest, why doesn’t it pay back its 'investors'?
To meet the specific audience that sitawi is designed to support - social organizations that operate small businesses - sitawi considers it necessary (at least temporarily) to charge lower interest rates, which does not allow compensation to investors. Additionally, the contributions to the Social Fund are made in the form of donation, with no provision for a financial return.
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When Social Loans become a reality in the Brazilian financial system, what will happen to sitawi?
sitawi's mission is to develop financial infrastructure for the social sector in Brazil. The first instrument we chose to move in this direction is the Social Loan. Once credit becomes an ordinary instrument to finance social impact, sitawi, as the field’s pioneer, is well positioned to become a credit union or a regulated bank, adding advocacy on emerging challenges for the sector (e.g. tax issues or regulation).
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RELATIONSHIP WITH SITAWI

Why should I make my donation to sitawi instead of donating directly to an organization?
When the donation is made directly to an organization, it uses this investment once. If this same resource is invested in the Social Fund, it will become revolving and perennial, as the donation goes into the fund and is readily used for loans. Once the loan returned, a new loan may be made to other organizations with the same resource. Thus, the social impact of donations is multiplied.
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I want to 'invest' in the Social Fund. What will be my return?
Your 'investment' should be done as a donation, which does not allow financial return. On the other hand, you can be sure that your donation goes entirely to the Social Fund and you may:

• Receive newsletters with information on the progress of projects;
• Receive regularly a transparent report on the allocation of resources and sitawi progress in accomplishing its mission;
• Deduct up to 2% of your company’s income tax, if it is based in Brazil and opts for “real profit” taxing regime;
• Deduct your donation in the case of companies and individuals resident in the United States, according to local tax regulations (please contact us and learn how);

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Can I suggest an organization to sitawi?
Yes, everyone interested in the strengthening of social organizations and development of financial infrastructure for the social sector in Brazil may submit nominations. Send your suggestion to This e-mail address is being protected from spambots. You need JavaScript enabled to view it
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Can I volunteer at sitawi?
Periodically, sitawi has specific tasks that can be conducted by volunteers - usually linked to the development of the organization. If you are interested in joining the group of volunteers, write to This e-mail address is being protected from spambots. You need JavaScript enabled to view it with a description of the skills you want to make available to our mission (or include your resume)
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