How Micro-Loans Saved The Planet
The other day I posted about kiva.org a website that allows ordinary people like me to help entrepreneurs in the developing world, start and grow their businesses through Micro-Loans (loans for small amounts, usually less than $1000). I was amazed because they recently raised over $41mil of loans. This got me thinking about the power of this website and how effective the micro-loans approach to economic development could be. After pondering the matter I'm optimistic that this can be a way to really create change in the world.
Don't get me wrong, giving good old fashioned charity is very important, in times of crisis and emergency it's essential. But when we look at making a true paradigm shift in the state of the world, micro-loans can be very effective. Here are my reasons for this:
1. Micro-loans are recyclable.
If we consider the $41 million dollars raised so far, this is money that will be put back in the pot. It get's to do it's good and then can be re-used to help more people.
2. Micro-loans can create a virtuous domino effect
Industrialisation worked in the western world in the 1800s and early 1900s. That doesn't mean it works for the developing world today. Supporting local, small-scale entrepreneurs who operate in an environmentally and socially less disruptive way means that you can encourage economic growth at the lowest levels (where it's needed most). Improving the financial situation of these small business people means they'll be able to support the businesses of their neighbours, slowly but surely stimulating the economy as a whole.
3. It can be profitable to offer micro-loans
A lot of people believe it'll take the prospect of profits to fix the problems that the world has today. Mirco-loans as well as being totally awesome can actually be profitable. In fact a few large commercial banks in Asia and South America offer or are looking to offer some kind of micro-credit facility. Imagine a different spin on Kiva.org, perhaps a website that allows you to go into joint ventures or give out micro loans at interest. This not only opens up a new, useful investment option for people with money, but it could also change attitudes. It's a lot harder to ignore what's going on in the developing world when you're financially invested there.
Anyhows, these are my musings on the matter, even if you don't agree with me, check kiva.org out today, it's made a really big positive impact in my life and I just wanted to share that.
Thanks!
3. It can be profitable to offer micro-loans
A lot of people believe it'll take the prospect of profits to fix the problems that the world has today. Mirco-loans as well as being totally awesome can actually be profitable. In fact a few large commercial banks in Asia and South America offer or are looking to offer some kind of micro-credit facility. Imagine a different spin on Kiva.org, perhaps a website that allows you to go into joint ventures or give out micro loans at interest. This not only opens up a new, useful investment option for people with money, but it could also change attitudes. It's a lot harder to ignore what's going on in the developing world when you're financially invested there.
Anyhows, these are my musings on the matter, even if you don't agree with me, check kiva.org out today, it's made a really big positive impact in my life and I just wanted to share that.
Thanks!
