- May 11, 2006I share this idea and source as a concept for inclusion into courses in
anthro as perhaps "adaptations to globalization and its social
From: Bailis, Michael
Sent: Wednesday, May 10, 2006 12:58 PM
To: Lewine, Mark; Bernatowicz, David; Salem, Dorothy
Foundations Turn to Microfinance to Fight Poverty
While there is no single solution to the problem of poverty in the
developing world, one strategy -- microfinance -- is attracting support
from two groups, free-marketeers and trad- itional foreign-aid types,
that don't always see eye-to-eye, BusinessWeek reports.
Traditionally, microfinance initiatives provide small loans to poor
entrepreneurs, who often are self-employed and run home-based
businesses. But while most of those initiatives are started with public
or private philanthropic funds, many eventually become self-sustaining
Given its past successes, many in the microfinance community are now
working to create a more professional, inclusive system that reaches
deep into poor rural and urban areas. As a low-risk way to expand into a
region's informal economy, commercial lenders are beginning to offer
wholesale products and services to microfinance institutions, which in
turn are moving beyond their traditional small-business base to offer a
wider range of financial services, including savings accounts, money
transfers, insurance, and an array of loan options. "The big idea is
that the poor need the same range of financial services the wealthy do,"
said Frank F. DeGiovanni of the Ford Foundation. "We're really trying to
figure out how to get the poor into the finan- cial mainstream."
Private philanthropy is part of the answer. The Bill & Melinda Gates
Foundation has awarded $2.2 million over three years to the microfinance
organization Opportunity International to develop a trans-African
network of new commercial banks for the poor. The foundation also gave
$5.5 million to the Aga Khan Foundation USA for a microfinance
initiative in Pakistan and Tanzania. Meanwhile, the Michael & Susan Dell
Foundation is concentrating its microfinance efforts in India, where it
plans to invest substantial sums over the next five to ten years.
Although there are about a dozen microfinance institutions in India,
it's estimated that as little as a tenth of the market is being served.
"Some of the most powerful social changes brought by micro- finance
occur when a family is able to earn that little bit extra, enabling them
to keep their kids healthy and in school,"
said Caitlin Baron, director of the microfinance intiative at the Dell
Foundation. And that, she adds, oftens opens "the doors of economic
opportunity to the next generation."
"Microfinance: Services the Poor Can Bank On." BusinessWeek 5/02/06.
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