Micro-Loans for Entrepreneurs among the Extremely Poor
Micro-lending, sometimes called micro-finance, provides disadvantaged people with a way to better their circumstances. Through small loans known as micro-loans, extremely poor people are able to invest in their own income-generating enterprises. Micro-lending builds confidence and hope while enabling these entrepreneurs to support their family through their work.
According to the World Bank, there are 1.4 billion people who are living on less than $1.25 a day (in U.S. money). These people often do not have access to clean water, sufficient food, shelter, or even the most basic health or medical care for themselves or their families. Simply put, they have no way of starting their own business and are not candidates for traditional loans.
But with a micro-loan financed by caring individuals, these poverty-stricken people have a means to help themselves. For example, people in underdeveloped countries have applied for small loans to purchase food for their cows, to open a small village shop to sell garments, and to buy materials to make clothing. Remarkably, repayment rates on these micro-loans are reported as being very high, suggesting that investing in the poorest of the poor may not only help the impoverished but can also help (or at least not harm) your own financial well-being.
In recent years, social entrepreneurs have created mechanisms to facilitate lending money to people in dire need in small amounts (as little as $25) with reasonable (or no) interest. As these poverty-stricken people succeed, they not only improve their own lives but also generate the income to repay their loans, which frees up that money to be lent to other extremely poor workers.
The best news is that anyone with Internet access and a few bucks to invest can help. By investing in extremely poor people, you are giving them a vote of confidence and desperately needed financing to help them lift themselves out of poverty, with dignity.
I Did This!
Make a Difference
animal welfare helping children community development environmental protection health & safety poverty & homelessness