micro-credit

I can't remember if I posted about micro-credit before on my blog. I may have mentioned it when I read Mohammed Yunnus' book "Banker To the Poor." [If you haven't read it, you need to stop reading this right now and go buy it]

As I tend to become borderline obsessive about topics, micro-credit is my newest passion. Over the past few months, my interest slowly grew as I learned more about poverty around the world but recently, my interest transformed to action. I just finished reading another great book that broke down the reasons why micro-credit is the best poverty-busting method. The book is called "A Billion Bootstraps" and it positions micro-credit as a philanthropic investment rather than charity. 

As a brief summary, here are the basics of micro credit:

1) A small loan is given to an entrepreneur in a developing country

2) This loan will help the person expand their business and provide increased monthly income

3) The loans are approx. equivalent to the average GDP in the developing nations

4) The repayment rate is nearly 100%. 80% of loans are given to women

5) By investing in these businesses, the cycle of poverty is broken and a sense of pride is developed as the loans are paid back

6) The repaid loan is then lent to other entrepreneurs

 

Micro-credit gives dignity to those struggling in the cycle of poverty. Did you know nearly 4 billion people live on less than $4 per day? The need is great. So after reading this book, I knew I had to act. Once we know something can be done to help our neighbour, the responsibility is on our shoulders to do it. We cannot claim ignorance. 

I decided to go to kiva.org where entrepreneurs post their loan requests and you can choose a project from all over the world. I have provided a portion of the loans to the following entrepreneurs:

1) Evelyn Amoah

2) I Hope to God Group

3) Victoria Sogaolu

Once my investment is paid back, I will re-invest it in other business projects. It truly is the gift that keeps on giving. I can think of no other philanthropic activity where the "donation" continues to change lives long after the initial contribution. I truly believe micro-credit will revolutionize the world and create opportunity for all, not just a privileged few.

"Massive poverty & obscene inequality are such terrible scourges of our times...that they have to rank alongside slavery and apartheid as social evils."

- Nelson Mandela

To learn more about micro-credit, visit kiva's site. Now you know.