RSF Prime: Six Years Later, Here’s How It’s Going
May 17 2016
Can you imagine your bank inviting you to come and talk about your interest rate?
I usually open RSF Social Finance’s quarterly pricing meetings with this question. So far, no one has said yes.
That’s understandable. When we decided in late 2009 to abandon LIBOR (a move that turned out to be prescient) and set our own rate for the RSF Social Investment Fund, which we call RSF Prime, that alone was a departure from common practice. What seemed truly radical, though, was our commitment to setting the rate collaboratively, with face-to-face quarterly pricing meetings involving investors, borrowers and RSF staff all playing a significant role in determining the interest rates investors receive and borrowers pay, as well as RSF’s share of the revenue.
Some of our own staff initially thought this was a crazy idea, even given RSF’s history of innovation as a funder of for-profit and nonprofit social enterprises. It still feels radical to new participants. They don’t know quite what they’re sitting down to: the whole system of lending and borrowing becomes visible to them in a way it never has before.
Continue reading on the The Huffington Post.