Thursday, July 16, 2009

A World Without Poverty

Muhammad Yunus put things in perspective and reminded everyone that the purpose of microcredit is to eliminate poverty in the shortest possible time frame and showed that it can be done!

Consumer philanthropy and micro-lending have revolutionized the world by providing the financial resources to empower the poor to become economically self reliant. It's easy to understand the appeal of microcredit. It plays an important and major role in the eradication of poverty besides providing an opportunity for everyone to get involved. I salute the entire community of contributors.

Kiva, Microplace, Wokai, SKS, Grameen Bank, United Prosperity and many others are essentially creating the platforms for an average person to make a tangible impact.

I think there should be more transparency in the whole process. The system is moving towards it albeit too slowly though. Microcredit is making people’s lives better around the world but I believe still a lot needs to be done to lift them out of poverty. Also, for all the heart warming stories in the media there should be sufficient evidence to back it up.

Best put forth by Dr. Yunus: Microcredit turns on the the economic engines among the rejected population of the society. Another testimony to this fact is that today microfinance is still flourishing, and even expanding. I definitely encourage everyone to read this report by Deutsche Bank Research on microfinance as an emerging investment opportunity. Yet, to avoid microfinance from crumbling under the pressure of capitalism we need a thorough administration of microfinance policies, principles and processes. Also, the next generation of MFIs should ensure that microfinance does not become the next asset bubble.

I am not a skeptic but a strong believer and proponent of microfinance however a lots needs to be done. We are moving in the right direction and let's keep marching ahead.

Here are a few questions to ask before you contribute:

Are these organizations actually performing well?
What are the improvements in health, education, and community development?
What percentage of women are served?
Look for the 2 important aspects: sustainability and outreach?
How much of your money actually gets to end user? What interest does the MFI charge?
(The global average interest charged on microloans is 30% (typical the range is 15% to 70%)) Is lowering interest rates for poor borrowers an important goal?

These websites are also helpful if you are interested to learn more.
Microcredit Summit Campaign, CGAP , GDRC, and SEEP Network.

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