“Give a man a fish, he’ll eat for a day. Give a woman microcredit, she, her husband, her children and her extended family will eat for a lifetime.” Bono.
Microfinance is not a new concept. The “susus” of Ghana, “chit funds” of India, and “tandas” in Mexico are just a few examples of savings and credit groups that have operated for centuries. Formerly called “micro-credit”, in the mid 1990’s the term of choice became “micro-finance” to encompass a great service model.
What is micro-finance anyway?
Microfinance is a sector of financial services that provides loans, savings, insurance, and training to those living in poverty. Its’ goal is to be a sustainable and entrepreneurial solution for alleviating poverty around the world. It is the only economic development idea to win a Nobel Peace Prize, when in 2006 the prestigious award went to Muhammad Yunus and the Grameen Bank, the financial institution for the poor that Yunus founded in Bangladesh.
What does micro-finance have to do with women?
Women comprise 70% of the world’s poor. This is due to the fact that women are excluded from fundamental notions such as education, employment, property ownership and voting rights in many countries. Because women represent the highest population of those living in poverty, they have become the priority of micro-finance organizations. Therefore, targeting female entrepreneurs makes clear sense if you want to disrupt the poverty cycle. As women’s overall circumstances are improved, so are the lives and futures of their children and communities. Programs and policy are clearly following this trend. In 2010 alone, over 105 million borrowers were granted a microcredit in developing countries and 80% of those beneficiaries were women.
Parveen Baji of Pakistan used a $70 loan to turn her life around. The illiterate mother of nine and wife of an abusive, drug-addicted husband, Parveen hit rock bottom when she had to ask her neighbors for food. Her loan from the Kashf Foundation , however, allowed her to start a jewelry and cosmetics business that quickly took off. From this she opened a restaurant and catering business that now employs eight people. With this income, Parveen not only put her children through high school and son through college, but she also learned to read. As Parveen so succinctly said, “Microfinance has changed my life.”
How can you get involved?
The options are limitless. You can talk to others about microfinance and raise awareness or make an investment yourself. If you’re uncertain where to start, we’ve offered some ideas below:
Boston Microfinance Club (BMC)– The Boston Microfinance Club (BMC) is an all-inclusive club connecting institutions, organizations, and individuals in the greater Boston area involved in microfinance. BMC provides a wide array of opportunities for enthusiasts, ranging from microfinance professionals to networking and local events for those simply interested in learning about the field.
Microplace- Microplace is a brokerage platform that allows you to invest in companies that create a positive social impact in the US and abroad and offer a financial reward in return. This platform allows you to search for companies by location, by unique ownership status (ex. women-owned) and even by return on investment. The minimum investment is a mere $20 (probably less money than you spent at Target this past weekend on items which offer no ROI) and you can conveniently pay through Paypal.
Accion- Accion is a recognized leader in U.S microfinance and has helped thousands of small business owners grow and thrive. The US Accion Network, the largest domestic micro-lending network, itself has lent over $272 million since inception in 1991. Accion is honoring women this Mother’s Day, and with every donation of $40 or more your Mom will also receive a gift! If you’re interested in helping out on a continual basis, they offer numerous exciting volunteer opportunities and access to projects involving translation, social media, grant proposals, and even legal advice.
This article is written by Megan Tranfaglia, Legal Blogger for Empowerment Legal. Megan is a Junior at Suffolk University’s Sawyer School of Business, Majoring in Entrepreneurship & Marketing. Megan is the Director of Marketing Street Teams for The Suffolk Entrepreneurs.
Disclaimer: This content is intended only to provide a summary and general overview on matters of interest. It is not intended to be comprehensive nor does it constitute legal advice or legal opinion. This content is intended, but not promised or guaranteed to be current, complete, or up-to-date and should in no way be taken as an indication of future results. You should seek legal or other professional advice before acting or relying on any of the content.
