You may have heard the term “micro-finance” in news stories, or perhaps a friend or family member talked about how he or she is using this concept to help an impoverished person in another country.
Essentially, micro-finance is a form of banking that involves giving small loans to poor people to help enable them to get out of poverty. According to Scientific American, micro-finance was created by Grameen Foundation founder Muhammad Yunus; the original concept originated in the 1970s in Bangladesh.
How It Can Improve Lives
As the pioneer of micro-finance, Yunus used his own money to give very small loans to women in Bangladesh who were making bamboo furniture. Instead of having to rely on unfair or unethical loans that were designed to make money for a lender, Yunus found that providing tiny loans could make an enormous difference to the women. In addition, since traditional banks are unwilling to make such small loans, micro-finance allows hard-working impoverished people to get access to the money that they need to succeed. Over time, the poor person will pay back the money.
A classic example of how micro-finance can work is an impoverished woman in a third world country borrowing a very small sum like $40 to purchase some chickens. She raises the chickens and sells their eggs to people in her community, and as the chickens breed, her egg income increases and she also sells some of the chicks. Eventually she pays back the $40 and continues to raise chickens, which also provide a good source of nutrition to the people in her village.
How It Makes an Enormous Difference
Over the years, a number of micro-finance companies have been launched. One of them, called Kiva, was founded in 2005; the organization allows people to make loans as small as $25 that will help someone to start or grow a business, get access to clean energy or go to school. In the past 10 years, Kiva alone has allowed more than 1.5 million people to provide needed small loans to two million borrowers in more than 80 countries. During this time, according to Kiva, more than 97 percent of the $1 billion that has been lent to impoverished people has been paid back.
How to Get Started
One of the many appeals of micro-finance is that many people can take part in it. While you might not have an extra $3,000 sitting around to loan to someone halfway around the world, you probably have $25 that you can give to a go-getter who is determined to get out of poverty. To get started, Google something like “micro-finance companies” and select an organization to work with — Kiva and Whole Planet Foundation have both been around for some time and are good choices.
Once you have chosen a company, you will get the positive experience of loaning a small sum to someone and making a difference. A great and convenient way to do this is by using a cutting-edge smartphone like the iPhone 8; the phone has robust security features, like the fingerprint sensor, that are especially important to have when using your smartphone to make contributions to a worthy cause. As a bonus, the durability of the iPhone 8 and its ability to automatically back up your information will help keep your sensitive financial data from being lost. Since your iPhone 8 is typically with you at all times, you can use it to get updates on the benefactor of your loan, as well as make additional micro-finance loans safely and securely.