Microfinance: Difference between revisions

Microcredit banking offers business training, peer support, and small loans (even only a few dollars) to the world’s poorest people. It has been extremely successful at driving sustainable development. Microfinance is a form of Socially responsible investing.

Integral part of development

Microfinance is not a complete solution to development problems, but can be an integral part. For example, microcredit is used in the Slum Networking^W model, to enable facilities to be built by the slum community without relying on subsidies.

Microlending is a new emerging solution to economic development because it allows its recipients to reinvent their lives; it is a bottom-up, grass-roots approach that recognizes the entrepreneurial and tenacious spirit of the poorest of the poor. It is a way to build infrastructure, save lives, create role models, unlock people's potential, and ultimately push a hurting economy forward.

Get Involved!

Www.PromoteAfrica.Org [1]

Remember that microlending is never simply about providing handouts to these individuals; it is about providing a hand up—a long-term source of income, livelihood, and lifestyle for people whowill get to spur innovation, unlock their potential, create a microbusiness, and help provide for the needs of their families. Then, they'll pay their loan back, creating a sustainable system through which to give aid at minimal or no price, and magnified results, loan cycle after loan cycle.

To ensure that good will come of all tax-deductible donations this year, the very first thing we're doing is putting it toward our first cycle of loans to Project HOPE's Village Health Bank, consisting of 20 people: caregivers to the elderly, orphaned and vulnerable children, and at-risk young women. Once we've met their loan needs, we'll put money toward community development projects: Ongandjera Solar Ovens Project for elementary schools (which encourages nutrition and enrollment), BEN Namibia (bicycle transportation, income-generation, and even ambulances), and Yelula, an HIV/AIDS prevention and mentoring network. Then, when we think it's the right time to expand, we'll build that website which will allow you users to donate and lend money directly toward sustainable lifestyle and development initiatives. We'll even build a hedge fund to lower your risks of losing even a cent by 95%, to further encourage micro-lending.

The biggest goal of our microfinance project is to put in your hands the ability to lend and donate to these amazing causes directly, and even to have full choice in which projects your donation will support. Since this is year one of our Microfinance project, we don't yet have that website up yet--we don't have the funding. Once we do, we can and WILL extend our campaign to more than asking for donations However in order to start up, we need to ask for money once, to create something actually self-sustaining: a website that will give social investors like you, but around the entire world, the ability to directly donate and loan to the causes of your choice. If you invest in a cycles of loans, as soon as they are repayed (Project HOPE has had a 96% repayment rate, and 100% with the Village Health Bank), that money will be returned right back to you, to either buy that new laptop, or to reinvest it into another fulfilling project of your choosing. Your efforts toward this self-sustaining platform, once sustainability is achieved, will be echoed and echoed and echoed in its contributions to long term economic and individual development in communities and in people.

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Amazing work is being done at http://www.PromoteAfrica.org --EXPLORE: there's a wealth of information here.

Agricultural microfinance

Livestock are used in innovative microfinance schemes such as "Cow Banks" and "Rice Banks"^[1] They can be a valuable tool in development.

Emancipation loans

Emancipation loans are used to release people from difficult situations, such as owing a large debt to a moneylender, and thus having no capital, and no means to repay the debt, in spite of hard work. The emancipation loan pays off the debt and releases the financial pressure, and they can then participate in other microfinance activities. Repayment of this debt is deferred until the borrower's situation has improved; the time to begin repayment is decided jointly by the borrowers group (typically 5 people) to which she/he belongs. This is practised by the Grameen Bank^W as well as other MFIs (microfinance institutions).

See also

• Socially responsible investing
• Energy in Common
• Economic Strengthening: Finding the Right Tool for the Job

Footnotes and references

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Interwiki links

• Wikipedia:Microfinance