Moderators could we please start breaking this segment/forum down to economics, sociology, psychology,economics, anthropology etc etc?
Microfinance Gateway: What is Microfinance?
I have read and seen a little on this and it sounds fantastic. Not just for developing nations but enabling developed nations to give practical, non-sectarian, help.
EG
Quote:
The Original Banker to the Poor: Muhammad Yunus
We're sure you've probably heard of Kiva (if only because we can't stop raving about it), and now that Natalie Portman's put her pretty face behind the cause, microfinance seems to be the latest buzzword for business-minded philanthropists everywhere.
But if you want to know how this trend got started, you'll have to look beyond Kiva and its counterparts, all the way back to Bangladesh in 1974, where a young economics professor named Muhammad Yunus served as the world's first banker to the poor.
"One thing that led me to what I do now was a woman making bamboo stool. She told me she made two pennies a day. I couldn't believe why she made two pennies a day. She made beautiful bamboo stools," Yunus told CNN.
The woman told him that the rest of the money she earned went to a loan shark, who'd set her up with initial funding for her business, but forced her to pay it back at ridiculously high interest rates, sending her further and further into debt. Borrowing money legitimately through banks at a reasonable interest rate was not an option – because she was low-income, banks saw her as a financial risk, and refused to meet with her.
Yunus was appalled by the fact that she and other women in her impoverished village, Junta, were unable to make ends meet. He knew they only needed small loans to help them become financially independent. He began wandering around the village marketplace, talking to women who made and sold baskets, and asking them how large a loan they would need to get out of debt.
The total amount it would take for 42 poor basket weavers to get back on their feet? A mere $27 from Yunus' own pocket.
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