Microfinance has evolved a great deal in the past few years, and today it is providing a much-needed impetus to developing economies of the world. It involves financing small businesses and entrepreneurs who have little or no access to traditional lending institutions.
Microfinance or microlending works by empowering small scale business ventures or individuals engaged in business activities and facilitate a more or less decentralized development of the larger economy. What makes microfinance so significant is that it aims to bring resources to the underserved, neglected communities, individuals, and helps overcome impediments created by issues like racism, poverty and lack of local development to achieve their potential by using their latent skills and capabilities.
Here we will review a few microfinance initiatives that have and still are helping improve lives, grow small businesses and reshape economies worldwide.
Person-to-Person Loans for Clean Energy Access
Common energy provides person-to-person microloans in developing countries to small businesses needing a source of clean energy. It could be a restaurant or a street vendor; anyone could get the microloan for this purpose. Even homes needing clean energy are eligible to apply for the loan. It can prove to be a great initiative to fight climate change by facilitating migration to cleaner energy sources, which may not be affordable to many otherwise.
This is a novel initiative in the direction of green micro-lending to promote sustainability and focus the change it can effect to fight big climate change. It is about bridging resource gaps where most needed instead of merely looking to meet financial goals and aim for growth.
Kiva.org Lets You Give Out Microloans to Those In Need
You can help the needy by giving out microloans via Kiva.org without doing charity. It is called microlending with a cause. Kiva vets small entrepreneurs who genuinely need a small amount of money and lets individuals or a pool of small investors fund the loan to meet a borrower’s needs.
It could be a farmer in need of money to buy seeds or pesticide or someone wanting to make repairs to their streetside shop. The smallest amount an investor can loan is US$25, and the organization keeps track of progress made by the borrower. Once the borrowers make a profit, they start paying back.
Lenders have the choice to withdraw or lend someone else and keep the cycle in motion. Now would you instead lend, even as part of a pool of investors, someone looking for guaranteed car loans, or a small entrepreneur who needs money for his business needs? The choice is yours.
Bolga Baskets Funding Education for Girls in Ghana
Kalbeo Women’s Trading Group in North-Eastern Ghana sells these hand-woven Bolga baskets to raise money for sending young girls to school. This unique campaign is endorsed with the catchphrase “buy a bag, send a girl to school.”These words carry the vision of a better future for these young girls and allow handicraft buyers to contribute to this noble cause.
Working in collaboration with CENSUDI offering small loans, the Kalbeo Women’s Trading Group is making a novel and noble effort to help bring education to every single young woman in Ghana. The Kalbeo group makes these beautifully crafted baskets and cloth, pottery items and an assortment of other handcrafted goods to make a living.
WorldHaus Helping Build Sustainable Homes at $20-Per-Month
Housing continues to be a big problem in our fast-moving world. Millions are still forced to make do for a home or live in rented homes they can barely afford. To bridge this gap, WorldHaus came up with this sustainable housing solution for those in need. WorldHaus base model home consists of a one-room house in 20 square meters or 200 square feet built in 10 days with a starting cost of approximately $1,500.
WorldHaus boasts that its home offers enough space for all the necessary amenities including burning stoves, solar electricity systems and toilets. Another part of the problem is affordability, and to make it possible, WorldHaus is working in collaboration with microfinance institutions and allows homeowners to pay off at only $20-per-month.
More such sustainable micro-financing solutions are needed to power developing economies of the world. The most significant advantage afforded by micro-financing is that those who cannot access traditional lenders offering home loans or guaranteed car loans for bad credit can still approach micro financing institutions to borrow for their business and personal needs.
Microfinancing is nothing new, but it has emerged as a highly efficient tool for developing sustainable financial solutions in the developing world. These are only a few initiatives to bring a change by empowering underprivileged communities, resource-starved regions and truly deserving small businesses and entrepreneurs. It underlines the potential of microfinance or microlending in solving real-world problems where most needed.