Microfinance: A World of Opportunity

One of my favorite books, Half the Sky: Turning Oppression Into Opportunity for Women Worldwide, introduced me to the concept of microfinance and its potential to absolve poverty while elevating the status of women. Before discussing microfinancing's implications in poor communities, however, an introduction is necessary.

In essence, microfinance consists of the provision of loans to low-income individuals that lack access to traditional banking. These loans can be used to expand pre-existing family business (like a farm) or establish independent small businesses. Well-organized micro-financing operations have been extremely successful in breaking clients out of poverty. Muhammad Yunus, Microfinancing guru and founder of Grameen Bank, claims that about 15% of clients break free of poverty every year have paid back all loans and broken free of poverty each year. The success of this economic empowerment is an incredibly exciting prospect in a developing world. As banking develops microcredit could easily expand at a relatively low cost yielding economic and societal progress.

As a delegate at East Tennessee's annual Model United Nations Conference, I proposed a microcredit pilot program for the Caribbean nation of Trinidad and Tobago. I started my research with the sole intention of economic opportunities for the impoverished; however, I soon discovered that microfinance can be a vehicle for sexual empowerment as well. By restricting membership to only poor women, you are giving females the chance to be financially independent. They no longer rely on spouses and gain more respect and power in their households. This gives women the freedom to demand rights, leave abusive relationships and raise their children the way they see fit.

The United Nations, MIT's Jameel Poverty Action Lab, BBC Business Weekly Program and countless professors and sociologists have conducted research on the implications of microcredit. Their findings have fueled the movement's growing momentum. Each year microfinance expands to new cities and nations, casting a wider net of opportunity. Thankfully, the days of controlling the needy by handing out rations are beginning to fade. Instead aid is becoming focused upon empowerment and economic independence and I couldn't be more excited.