Microloans are small loans granted to impoverished borrowers from the original site, typically from developing countries, who normally would not have access to credit from banks or other financial institutions. Microloans were first developed in Bangladesh, supporting women to create small businesses and employment opportunities where none existed. Over time they have spread to include anybody with a worthwhile enterprise in a disadvantaged situation.
While microcredits have their critics, they have shown the potential to improve people’s lives and provide a degree of financial independence. On a personal note it’s fantastic to see that such a small sum of money can make such a difference. Typically once a loan has been approved, the sum total is divided into lots and each participant finances one lot of twenty five dollars. The loan is then repaid over time, interest free. Amazingly the rate of delinquency is almost non existent and loans are generally repaid fully and on time. I have been involved in microloans for many years and I find it a fantastic social justice tool, especially for college age students who discover a little of the underprivileged world outside their environment.
If you wish to get involved in this activity, there are many providers on the internet, all with very high ethical and moral standards. Two of the best to get involved with are Kiva and Good return . Kiva operates worldwide while Good return focuses on the South East Asia-Pacific region.
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