The birth of modern microlending started with a 27 dollar loan. A Professor by the name of Mohammed Yunus grew tired of cycle of poverty in his native country of Bangladesh. Loan sharks would take advantage of entrepreneurs where in one case a group of women who hand made bamboo stools only saw a once cent profit. With his 27 dollars the women were able to pay back the loan shark, buy materials, and become prosperous.
As this practice showed success, Yunus started Grameen Bank of Bangladesh — first lending institution to provide unsecured start-up loans for the working poor. Now Grameen Bank has more than 7.5 million borrowers in 82,072 villages. And now, organizations all over the world are engaging in this practice of social good. Microlending encourages entrepreneurship and financial independence for the poor who can be easily exploited trying to make a living. Loans are seen as more effective than donations because people are motivated by being held accountable.
Providing loans to entrepreneurs in countries where individuals have little access to credit has a myriad of benefits, to borrower and lender. People are rewarded with a small return on their investment, but with a much bigger sense of fulfillment. Those who receive loans get a chance to make their dreams come true and provide for their families.
Reputable Microlending organizations:
- MicroPlace: Microplace.com
- KIVA: Kiva.org
- LAPO: https://www.lapo-ng.org/client.htm