Microfinance - Empowering the world's poorest people
Microfinance is often considered one of the most effective, flexible, and sustainable strategies in the fight against global poverty.
Microfinance consists of making small loans, usually less than $200, to individuals, usually women, to establish or expand a small, self-sustaining business. For example, a woman may borrow $50 to buy chickens so she can sell eggs. As the chickens multiply, she will have more eggs to sell. Soon she can sell the chicks. Each expansion pulls her further from the devastation of poverty.
Microfinance, the Grameen way, includes several support systems that contribute greatly to its success. Microfinance institutions offer business advice and counseling, while clients provide peer support for each other through solidarity circles. This contributes substantially to the extremely high repayment rate of loans made to microfinance entrepreneurs.
An equally important part of microfinance is the recycling of funds. As loans are repaid, they are re-loaned, multiplying the impact of each dollar.
Microfinance has a positive impact far beyond the individual client. As families cross the poverty line and micro-businesses expand, their communities benefit. Jobs are created, knowledge is shared, civic participation increases, and women are recognized as valuable members of their families and communities
Comments