Sunday, October 14, 2007

Micro-Finance; the new way to teach people to fish

Micro finance is not a new concept. It’s been around since the first teenager borrowed money from his dad for a night on the town. But today micro finance is a way to, in part, help equalize and in some ways redistribute wealth in the world and teach people a way out of poverty.

It goes like this. Most Americans have a couple of expendable bucks at the end of the month. Sometimes well give of that surplus to a local charity or church or even sponsor a child in a foreign country who needs food and medical attention. There is another option gaining traction today; micro finance.
What micro finance as a concept does is to provide small loans for small business start ups. Most people in underdeveloped countries are unable to obtain small loans to further their business or family development. If there is micro credit available, it is offered at exorbitant interest rates. Here is an example from the Kiva website. Lun Chanthy is a 23 year old house wife who lives in Cambodia and takes care of her two young children.

Her husband works as a vehicle tire repairman. In order to expand his business and meet customer demand, she would like to borrow $1,000 to purchase an air compressor to pump tires and invest in a stock of tires to sell to his customers. They expect the expanded business will bring in $10 per day in revenue. They will use the extra income to continue to invest in the growth of the business and to save money for their children’s education.

She currently has $175.00 towards her goal raised by kind hearted souls (like you and I) whom she will probably never meet. By helping people like Mrs. Chanthy we can change the world and help her forever change her family tree!

There are several groups that do that and there are links below to help you begin your journey.

Rob Bell in a Whittenburg Door interview says of micro finance…”…there are huge things going on. Like micro-finance. I was in Rwanda—essentially you take someone in poverty and give them a couple of bucks so they can start a business. We met a woman who started a business, built a house, fed her family and her business was now self-sustaining and growing—on a $40 dollar loan. A Western church gave this woman forty bucks and look what she’s done. Economically speaking, that’s one of the hopes of the world right now. We have more money than we know what to do with. American churches have more concentration of wealth than any time in history in a world with massive poverty. But some are exploring with micro financing, working with ground churches and trying things that could help save our world.”

You can now be your own venture capitalist!

Micro-Finance Handbook
World Relief
Info from Wikipedia
Great Organization doing MF

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