Rural Living News

What is Microfinance?

Microfinance is basically when money is lent on a smaller scale to people by organisations called microfinance institutions. If a budding entrepreneur in Africa contacted the local bank for a loan of $100 then this loan is likely not be given as the loan amount is too small and there is no profit in this for the bank. There is also no lending history if it is a first time loan.

The result is that millions of potential business people around the world cannot gain access to the funds that they need to build or develop an existing business. Sometimes all it takes is $100 to buy more stock at a discounted price and this profit can then be used to build the business in the future.

A pioneer was needed and Mohammed Yunus from Bangladesh stepped forward as he thought about giving small loans sometimes as small as $50 to help people to help themselves. $50 can buy phone cards for re-sale in Rural Africa, chickens for breeding and re-sale, open a small retail outlet or even a bicycle taxi. The options are endless and it helps people to reduce costs and make a profit. Traditionally these people have contacted local money lenders that charge extortionate interest rates and can threaten you and take possessions if the money is not repaid.

Microfinance often involves self help groups and peer pressure to ensure that loans are repaid. It works like this, a loan officer from a microfinance charity or bank will contact a village to explain what microfinance is and how it works. They are then encouraged to form groups of say 7 people and they all have the understanding that of one person fails to make a repayment of the loan then the others in the group need to contribute towards this amount. Loans are then requested and disbursed and repaid over a period of no more than about 18 months. Once the loan is repaid then members can often take out a bigger loan to fund more purchases. The repayment rate worldwide is around 98 percent which beats the banks hands down and has provided profitable businesses for those responsible for administrating the loans. These companies are called microfinance institutions and the biggest Indian institutions now loan millions of dollars per month to hundreds of thousands of borrowers.

A few years ago two genius people thought of KIVA which means that anyone in the world can make a loan of $25 dollars to a budding entrepreneur via the site and when and if the money is repaid they can then use this money to relend to another needy person or withdraw it and keep it for themselves.

Our website guidemegreen has started a lending group on KIVA and made $2000 of loans around the world and all of this has been repaid. May the good luck continue and none of the businesses I invest in fail as I will lose money. KIVA is hoping to lend 1 billion dollars via the internet site in the next 10 years. An enormous transfer of wealth from developed to developing countries.

Many countries including China and India are heavily promoting microfinance as one of the many tools to help alleviate poverty in villagers and urban areas around the world. KIVA has started to allow you to make loans to USA business people who need credit themselves as poverty exists everywhere not just in the third world.

About the Author

Davinos Greeno works for the green companies and fairtrade shopping directory that lists 100s of Organic and Ethical Companies and we also have green articles for you to read or publish.

Rural Microfinance

Banker To The Poor: Micro-Lending and the Battle Against World Poverty $3.40 It began with a simple $27 loan. After witnessing the cycle of poverty that kept many poor women enslaved to high-interest loan sharks in Bangladesh, Dr. Muhammad Yunus lent money to 42 women so they could purchase bamboo to make and sell stools. In a short time, the women were able to repay the loans while continuing to support themselves and their families. With that initial eye-opening suc…

Freedom From Want: The Remarkable Success Story of BRAC, the Global Grassroots Organization That’s Winning the Fight Against Poverty $23.41 BRAC, arguably the world’s largest, most diverse and most successful NGO, is little known outside Bangladesh, where it formed in 1972. Author Ian Smillie predicts, however, that this is bound to change. BRAC’s success and the spread of its work in health, education, social enterprise development and microfinance dwarfs any other private, government or non-profit enterprise in its impact on ten…

Women And Microcredit In Rural Bangladesh: An Anthropological Study Of Grameen Bank Lending $33.00 The Grameen Bank of Bangladesh has been extending small loans to poor borrowers (primarily women) to promote self-employment and income generation since 1976. The apparent success of the Grameen Bank (that is, recruitment of clients, investment of loans, recovery rates on invested loans and profit margins) has made microcredit a new model for poverty alleviation and sustainable development. Anthro…

The Rural Alberta Advantage Tickets $91 “Buy Tickets for The Rural Alberta Advantage are available. Ticketliquidator.com gets you in!”

The Rural Alberta Advantage Tickets $91 Buy The Rural Alberta Advantage, tickets. Tickets for 11/17/2011 at Phoenix Concert Theatre in Toronto, ON are available. Ticketliquidator.com gets you in!

Villas Oasis Rural de Villaverde, La Oliva: 7 nights Self Catering $1240 The Villas Oasis Villaverde and Hotel are situated in the small village of Villaverde in the north of Fuerteventura. The Villas and Hotel are from early 20th century but have been brought right up to date with large, comfortable and stylish rooms. Each villa has its own small pool and all Hotel facilities are available to the guests that stay in the villas. The Villas Villaverde are located approximately 15 minute drive from the resort of Corralejo. This is the perfect location for anyone who wants to sample village life, away from the hustle bustle of modern living.

Pothos, Alykes: 7 nights Self Catering $686 The Pothos is in a beautiful rural location, the ideal place to relax. Location

Monteverde Villas, Javea: 7 nights Self Catering $1314 In a peaceful rural location, the Monte Verde villa complex is located in the Tossalet

La Colombaia Allodola, Vinci(Firenze): 7 nights Self Catering $1126 “”"The rural pleasures of days gone by are combined with all modern comforts.”"

Colina Mar, Puerto Rico: 7 nights Self Catering $666 “”"In a rural spot close to the beach, the Colina Mar Apartments showcase the best of Puerto”