Small Loans Can Have a Huge Impact
By: Teidi Mitteler | Posted: 16th August 2005
Small Loans Can Have a Huge Impact
Copyright © 2005 Teidi Mitteler
FCH Loan
http://www.fchloan.com
There's a new trend in the massive world of international
finance called "microcredit" or "microfinance." It's the process
of giving relatively small loans that help impoverished people
start or grow their own small businesses.
Instead of giving a huge check to the government of a country,
micro loans go directly to an individual, empowering them with
the chance to use their moxie and business sense to build a
better life. The loan is usually accompanied by guidance from
a mentor and community development assistance.
An example of a microcredit loan might be an Ecuadorian widow
being given $250 to buy tools to make her own leather goods.
She would get mentoring from the local community development
officers, and establish her business. When her profits increased
she would pay off the loan.
Women, who have the hardest time establishing a livelihood for
themselves, are frequently the recipients of these loans. Once
they get the loan they also get to be connected with a wide
variety of help from credit counselors and marketing experts.
Often, borrowers will themselves, after getting established,
help fellow loan recipients, and the cycle goes on.
Microcredit started in rural Bangladesh, a pioneering approach
developed by The Grameen Bank. In the language of the area
"Grameen" means "rural" or "village." In this rural area the
loans were used to buy goats, rabbits, to start small shops, etc.
The approach was so successful that it quickly spread around the
globe. The United Nations now has declared fostering microcredit
to be a formal goal of their organization.
Microcredit is a more personal approach to providing assistance
to impoverished people. Instead of just receiving a handout,
microcredit recipients join a community of mentors and fellow
businesspeople. The donors are often also very involved--one
organization urges donors to send an inspiring letter and a photo
of themselves along with their donation. Sometimes the donations
aren't used to help start a business but, for example, help a war
survivor get back on his/her feet.
Microcredit programs are found all over the world, but most
often in poor countries, or those that have been hit by natural
disasters, manmade disasters like war and genocide. Tsunami
victims will likely eventually be part of a micro lending
program. Programs are found in Rwanda, Afghanistan, Bosnia and
Iraq. These programs are working to raise the quality of life
for the people who need it most.
---------------------------------------------------------------------
Teidi Mitteler is the founder of FCH Loan
- the number one
resource for information on loans. To see more articles on
loans, visit this site: http://www.fchloan.com
About the Author
Occupation: Webmaster
Teidi Mitteler is the founder of
FCH Loan - the number one resource for information on loans. To see more articles on loans, visit this site: http://www.fchloan.com
Contact him at
http://www.fchloan.com
Printed From: http://www.articlealley.com/article_5109_19.html
Back to the original article
Tags: new trend, mentors, business sense, personal approach, businesspeople, livelihood, better life, rural area, credit counselors, hardest time, leather goods, goats