You asked, we answer: Can microloans lift women out of poverty?, By Nurith Aizenman, November 1, 2016, National Public Radio: “‘I would like to know more about microloans, and if they are in fact helping women start businesses in the developing world.’ That’s the question our readers wanted us to look into. You’ve probably heard the stories. A desperately poor woman in a poor country gets a tiny loan — a couple hundred dollars. It’s the break she’s always needed. With that money she can finally buy the materials to start a small business. She turns a profit. Her income rises. Now she has money to expand her business even further, buy her kids more nutritious food, pay their school fees. Over time, she lifts her whole family out of poverty. That’s the vision often associated with microloans in the popular imagination. But is it the reality..?”
Tag: Microfinance
Small Businesses and Microlending
A big breakthrough in tiny loans, By E. Scott Reckard, October 14, 2012, Los Angeles Times: “The Alameda Swap Meet in South Los Angeles is about the last place you’d expect to find a breakthrough in small-business lending. Filled with Spanish-speaking mom-and-pop vendors selling cowboy boots, videos, quinceañera dresses and fresh fish, the indoor bazaar tends to be long on cash sales and short on formal bookkeeping. But vendor David Manzo is building his business one swipe at a time. Every time a customer pays with a credit or debit card, a portion of that sale automatically goes to pay down a $5,775 loan to the Mexican immigrant, whose Mirna’s Market offers herbal remedies and religious items. The loan’s 12% interest rate is a fraction of what Manzo paid in the past for expansion and inventory loans. And he never worries about repayment. If business slows down, his installments drop automatically; when things pick back up, the higher sales mean the loan balance goes down faster…”
Benefits of Microlending
The bad – and good – news on microcredit, By Gregory M. Lamb, June 9, 2011, Christian Science Monitor: “First Muhammad Yunus founded the nonprofit Grameen Bank, which lent tiny amounts of money to poor people to start businesses. It appeared to be a revolutionary success and he received the Nobel Peace Prize for his work in 2006. In 2009, for example, Grameen had 6.4 million active borrowers with an average loan size of $127. Then came the second guessing. For-profit companies got into the micro-loan business charging high interest rates in order to generate an attractive return for their investors. While nearly all of Grameen’s borrowers repaid their loans in full, other lenders didn’t do so well. Borrowers began to default. Pressured by their creditors, some in India even committed suicide when they couldn’t repay their loans…”