Since the success story of Grameen Bank in Bangladesh with their MicroFinance model hit the mainstream media, several organizations have specialized in making available small loans to people all across the world to help start their own income and employment generating enterprises.
MicroFinance, as the name suggests, is a concept of tiny loans that are made to people who need the money to start a small business and who otherwise would not have been able to get a loan from a bank. In many countries where the per capita income of people is very low, loans are hard to come by and more often are made at the hands of loan sharks. Grameen bank has proven that small amounts of money given to people are usually paid back and are as safe as conventional loans.
But MicroFinance today, offers the added advantage of allowing anyone to make a loan get the advantage of creating a social benefit.
Kiva.org, MicroPlace.com, GlobalGiving.com are three such entities who are leveraging the internet to allow people (primarily from the US) to select projects around the world and loan as little as $10 towards a project. For example if a person in Pakistan requires $100, the amount loaned can be given by 4 people with a $25 contribution each.
You may or may not get your money back. But if you do, then you can loan the same money to someone else. A couple hundred bucks really does not matter one way or the other for a person in a developed nation. And that’s why MicroFinance may possibly be the easiest way to help people globally.
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