voices from abroad

Microfinance April 18, 2009

Microfinance involves making tiny loans to poor people in the developing world so that they can start businesses and break out of poverty. Muhammad Yunus, the founder of Grameen Bank, brought microfinance into the spotlight While traditional banks were not interested in making tiny loans at reasonable interest rates to the poor due to high repayment risks, Yunus believed that given the chance the poor will repay the borrowed money and hence microcredit could be a viable business model. Yunus received the Nobel Peace Prize for his efforts to create economic and social development from the bottom up.

Microfinance alone will not solve poverty, but it is a powerful and sustainable method of poverty reduction that has seen great success in the past decade. A microcredit loan is often the only means by which impoverished people can climb up the economic ladder in their communities. By lending to the working poor, Kiva lenders have succeeded in helping to break the cycle of poverty for many borrowers. The positive impact trickles through the community, as the income is oftentimes spent to educate children and support family members.

Interested in learning more about microfinance and poverty alleviation?

Creating a World Without Poverty,Muhammad Yunus

A Billion Bootstraps: Microcredit, Barefoot Banking, and The Business Solution for Ending Poverty, Phillip Smith

Banker To The Poor: Micro-Lending and the Battle Against World Poverty, Muhammad Yunus

Development as Freedom, Amartya Sen


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