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Wednesday, October 18, 2017

Micro-credit... Pennies from Heaven for the Poor

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The older guy was standing in a corner, a Diet Pepsi in his hand. He was dressed in shorts, flops, and a "Tee" shirt emblazoned with the slogan "over 50 and still gnarly" on the back. He was just minding his own business when the "suit" with the blue drink enquired of him, "And what do you do, sir?, for a living, I mean?...your attire suggests a fairly laid back lifestyle...Are you retired?"

The old guy eyeballed the "suit" from the top of his head to the balls of feet and with just a smallest flash of a smirk, he replied, "I am in International Investment Banking, I loan money." A flush of red slipped up from under the "suits" collar and spread to the top of his billiard ball shaped head. "International Investment Banking, I would have never guessed," said the eight ball.
"Pray tell, what sort of clients do you specialize in?"

"It varies, week to week, electronics in Afghanistan, textiles in Samoa and Honduras, cattle ranches in Tajikistan and Kenya, oh, and this week I am doing a a little dabbling in the restaurant bizz in Bulgaria."..."Bravo", exclaimed all three pieces, "getting in on the Third World economic explosion, I like it!"

No, this conversation, between me and the "suit", never really took place, but it could have. The other day, I was reading a commentary written by Nicholas D. Kristoff of the New York Times. It was titled, "Want to help the poor? Become one of their bankers." A great article that needs to be shared, it talks about how we, yes... you and I, can make small loans (as little as $25) to budding business men and women all over the globe.

Th electronics in Afghanistan, referred to above, is a small t.v. repair shop in Kabul. The cattle ranches are a couple of head of cattle in Tajikistan and Kenya, textiles are used clothing stores and the Bulgarian restaurant bizz is a small family owned eatery. What they all have in common is that through www.kiva.org they are arranging loans to open small businesses. By our standards, these are very small loans in stature, most less than $1000, but to these individuals they are immense amounts. At Kiva.com, you are provided information on borrowers from third world countries from all over the world. You see their photos, loan proposals, credit histories and their progress in funding. Further research showed that these "little loans" were "changing market fundamentals in the economies of some developing countries."

A Bangladeshi economist, Muhammad Yunnus, is credited with starting the "micro-credit" movement in 1976. He did an amazing thing, he lent a group of 42 artisans 62 cents each, so that they could buy supplies. All the loans were repaid and the Grameen Bank was born. It is the micro-world's best known micro-credit enterprise.

Twenty five years later, Yunnus reported, "When we started giving out tiny loans, we never imagined that one day we would be reaching hundreds of thousands, let alone two million, borrowers." Last year, Muhammad Yunnus was awarded the Nobel Peace Prize for his pioneering work...pretty cool!

How could $25 possibly change someones life? It's really simple. Poor people in developing counties, (What a weird designation, "developing country"), do not have collateral, nor the stable incomes to deal with mainstream banks. Unlike middle class America, $500 is more than a couple of weeks of groceries, or two nights at a beach hotel. $500 is enough business capital to fund a on-going family enterprise.

The facts seem to show that micro-credit loan repayment rates are better than than in "real" bank loans in the U.S.
There are a lot of success stories, and frankly, I couldn't find any research that warned of "scams" or "skulduggery."

It seems like a "win-Win" situation to me, you can print fancy cards, "JOE OR JOAN SMITH, INTERNATIONAL INVESTMENT BANKER". Wow your friends and impress that blond on the bar stool next to you...while, at the same time actually doing something that helps the poor. This could be as much fun as a game of "RISK".

If you just feel like giving some capital away, go to www.globalgiving.com. They will connect donors directly to would-be recipients. I personally liked the www.kiva.org site but there are plenty of similar sites, if you take the time to look for them.

"Want to help the poor?...Nicholas D. Kristof, New York Times
www.pbs.org/kbyu/smallfortunes
www.sustainabletimes.ca
"Small Change, Big Dreams", Murray MacAdam
www.worldhope.org



About the Writer

Steven Lane is a writer for BrooWaha. For more information, visit the writer's website.
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6 comments on Micro-credit... Pennies from Heaven for the Poor

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By Kay C on March 31, 2007 at 02:02 pm
Thanks for all the great information, Steven!
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By Tumerica on March 31, 2007 at 03:31 pm
Terrific description of the imagined confrontation between "Tee" and "Suit," just as between first world and third world. Thanks for the reminder. I'm checking out your links now.
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By Tumerica on March 31, 2007 at 03:40 pm
Cool! I just made a small loan to a gentleman cobbler in Kenya. Here's the letter the Kiva organization put together to distribute--they said it much better than I could: "Hi! "I just made a loan to someone in the developing world using a revolutionary new website called Kiva. "You can go to Kiva's website and lend to someone in the developing world who needs a loan for their business - like raising goats, selling vegetables at market or making bricks. Each loan has a picture of the entrepreneur, a description of their business and how they plan to use the loan so you know exactly how your money is being spent - and you get updates letting you know how the business is going. The best part is, when the entrepreneur pays back their loan you get your money back - and Kiva's loans are managed by microfinance institutions on the ground who have a lot of experience doing this, so you can trust that your money is being handled responsibly. "I just made a loan to an entrepreneur named James Kariuki in Kenya. They still need another $225.00 to complete their loan request of $250.00 (you can loan as little as $25.00!). Help me get this business off the ground by clicking on the link below to make a loan to James Kariuki too: http://kiva.org/app.php?page=businesses&action=about&id=6835&referralId= "It's finally easy to actually do something about poverty - using Kiva I know exactly who my money is loaned to and what they're using it for. And most of all, I know that I'm helping them build a sustainable business that will provide income to feed, clothe, house and educate their family long after my loan is paid back. "Join me in changing the world - one loan at a time. "Thanks!" Tumerica
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By Josh Marks on March 31, 2007 at 05:22 pm
Thanks for the article. What a great way to spread a positive image of the United States around the world through micro-credit. The great thing about an organization like Kiva is that it isn't charity but empowering people in developing nations to build their own businesses. This is the side of America the world needs to know about!
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By V on March 31, 2007 at 10:27 pm
Steven! I'd read about Muhammad Yunnus and it's just so very impressive. I'd also heard about Kiva ... and that's it. I just heard about it and it got lost in my head somewhere. Thank you so much for bringing this to everyone's attention. I am off to Kiva right now. Thanks Steve!!
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By Tumerica on April 01, 2007 at 01:03 pm
Saw Muhammad Yunnus on The Daily Show with Jon Stewart. He was a beatific and humble gentleman. I was most impressed.
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