Gotta correct my post on…

… microcredit to people from developed countries.

I just recently finished reading “Banking to the poor” by Yunus and in some later chapter he describes how he talked to hispanic women in Chicago about Microfinance. The one women, Maria, didn’t enjoy the right to do anything by herself, completely being dependent on her husband. Secretly, with the help of a microcredit, she started her own small business. On this way, she was able to generate some income, but also highly important is the fact that she found contact to other women and therefore was able to have a social environment other than her husband.

So, it makes clear that microcredit can be a really important and powerful tool in developed countries as well. It is not about supporting the high status of a wealthy country, it is about helping the poor of every country to become independent and self-reliable.
So, microfinance has the power to liberate women like Maria and give power to the poor through providing access to capital, why not doing it in countries like the US or France.

(this is a correcting entry to the post: Macy’s vs. Microfinance)

MICRO-finance on MACRO-level

Now that we come to the end of writing in the purpose of having to, I feel kind of sad to leave the Microfinance world behind. I decided I’ll keep on posting things coming up my mind, especially, and I think you might be interested, about the process of the loan I helped to fundraise for the fisherman from Cambodia. And of course, although not being able to lend to more than one person at once (student’s dilemma), as soon as the loan is paid back, I’ll reinvest!

What’s the outcome so far? And, did we learn something?

One of the greatest things I realized is that Microfinance is just universal. Today, I found an article about it in my Spanish book. If you keep your eyes open there are so many sources about Microfinance.

If the world is a global village…

… then I’m sure that organizations such as kiva or the Grameen Bank have  the ability to be the good guys, to make this village work with all its people  being involved and everybody contributing and benefiting from it.

And we can help to build this village!

If lending or donating is not enough…

… it is certainly possible to get engaged in organizations yourself. Today, I will tell you something about the work you can do at kiva.

The program is called kiva fellows. If you are a motivated person with certain core competencies such as speaking other languages, being really open and active and having the ability to take an effort and to take the initiative, then it might suit you. By the way, for those with a finance or business background: You have an advantage.

But what are you doing?

Microfinance and the empowerment of women

It might sound weird to you why we should give a special role to Microfinance regarding the uplifting of women all over the world.

From our perspective it doesn’t make sense, but in a great portion of the world women still live under conditions worse than in our Middle Age. As Isabel Allende puts it in her TED-talk there is always, even for the most poor and powerless men, still a women to look down at and to treat according to aggression from failure.

In order to stop this inequality, Microfinance is a great thing. It gives women that don’t earn anything, that don’t account for their own money or financial needs, these women is given the chance to start something on their own. They don’t need to depend on their husbands, sons or fathers anymore. For many women in developing countries it is the first time that they realize they have rights.

Fisherman from Cambodia paying back 10%

When registering kiva and supporting Chuk Seab from Cambodia, people asked whether I would know soon if I get the money back. Now, I can tell you…YES, IT WORKS!

Yesterday, I got an e-mail from kiva telling me that I have now $2.50 as available kiva credit due to the fact that the entrepreneur I supported paid back $50 out of $500!

Are banks people-worthy?

This is the question Muhammad Yunus imagines for the future instead of Are people credit-worthy?

Why that? Well, his vision is to fight poverty, to make it a thing of the past and only to have poverty in a museum.

What is poverty actually?

Want to read more about Microfinance?

People that followed up a little might want to read more about Microfinance, and as I get to my limit of transferring knowledge about Microfinance I want to give you some books!

First of all, of course, there are the books written by Muhammad Yunus himself.

The first book he wrote in 2003 about

the foundation of the Grameen Bank and how Microfinance works.

It is more an autobiography. Banker to the Poor – Micro-Lending and

the Battle Against World Poverty

shows  how Muhammad Yunus developed the vision of microcredits.

On this website you can have a sneak view into the  book!

Macy’s vs. Microfinance?

Today I was wondering if it really makes sense to introduce Microfinance in countries such as the US or maybe France? Kiva started doing so in 2009 for some reasons you can explore here!

First of all it sounds weird regarding the fact that it was intended to help the poor. In general we wouldn’t consider a French or American as poor, if we take a second glimpse though, it might be reasonable, as there are people as well who won’t receive a loan from a regular bank. Is it really?

A special case: The crisis in Andhra Pradesh

In march 2006, the government of Andhra Pradesh,

the fourth biggest state of India, closed down over 50 branches of the Micro-Finance-Institutions

of the area. Now, you are probable wondering why a state government

should close down such institutions, thus they are doing good work.

But also the Microfinance sector faces problems.

Why are the interest rates so high?

Looking at my portfolio on kiva I find that Chuk Seab, the fisherman from Cambodia I decided to support has to pay 31% of interest on the $500-loan he requested. Obviously, I won’t receive any of that and kiva neither, but the Micro-Finance-Institution, in this case Hattha Kaksekar Limited (HKL).

So, why  are they taking such a high interest rate of 31%? And how come that the average interest rate of loans of that kind is even 36% and kiva’s average topping it with 38.43%?