Micro . . . what? Sure, the term microfinance may sound complicated, but its message is simple: giving loans to budding entrepreneurs in another part of the world who need a little leg up to get out of poverty.
If you're familiar with the microfinance world, the name Kiva will often pop up, and if you were watching Oprah last Friday, you'd know it was one of her favorite things. Kiva is a nonprofit that provides an Internet platform for lenders to connect with microfinance institutions around the globe. But don't worry, you don't need match up to an Oprah Winfrey-like donation — even a $25 loan can make a difference. We talked to Kiva's CEO Matt Flannery, who told us more about the feel-good nonprofit.
SS: Tell us more about the women entrepreneurs who take these loans.
MF: There are billions of people that are in poverty and most of them don’t have a job. There are no jobs in their area and there’s not really a bank to help them save money or to get credit. So they have to start their own businesses and work for themselves. Microfinance is the global movement of providing loans to those people and bank accounts to those people for the first time, so little by little, these people are coming online to the financial banking system, and oddly enough most of them are women. That’s because women are often the heads of their financial households in the developing world, and they pay back loans at a higher rate, and they use their loans to help their family first and foremost.
Tell us in the comments: Do you believe that microfinance has the power to enact change on a large scale?
Image Credit: Kiva