Microfinance as a way to develop White Center
Most people are aware that the greatest impediment to the start and development of the business is lack of capital. Tradtionally, banks only lend money to people who already have money. This makes it extremely difficult for would-be entrepreneurs to start a business — even one that is desperately needed. One solution to this quandry is the pooling of resources by a community to assist its members with the initial loan that gives them entry. The Asian and Latino communities already have models of this practice, the latter known as Tanda. Variants of this practice are known broadly as microfinance.
Microfinance refers to the provision of financial services to poor or low-income clients, including consumers and the self-employed.[1] The term also refers to the practice of sustainably delivering those services. Microcredit (or loans to poor microenterprises) should not be confused with microfinance, which addresses a full range of banking needs for poor people.[2]
More broadly, it refers to a movement that envisions “a world in which as many poor and near-poor households as possible have permanent access to an appropriate range of high quality financial services, including not just credit but also savings, insurance, and fund transfers.”[3] Those who promote microfinance generally believe that such access will help poor people out of poverty.
I would be curious to know if readers have any thoughts on this subject and how it might used as a tool to spur economic development and vitality in White Center and other areas.
Tags: microfinance
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April 5th, 2009 at 12:06 am
Microfinance is happening in far flung corners of the world. Why not White Center? In 2006 Muhammad Yunus won the Nobel Peace Prize for his efforts in his microfiance project, Grameen, which began in Bangladesh in the 1970’s and now operates around the world, including the USA. KIVA was started in the Bay area by one of the founders of PayPal and has a system where individuals (like you and I) can make loans as little as $25 dollars to folks around the world that have a good idea and need a small amount of cash to get it going. Often as little ad a few hundred dollars helps folks get started. The default rate for KIVA is about 2%. How does that compare with Wall street? I have heard that KIVA is laying the groundwork to start micro loans here in the USA. Look up KIVA and the Grameen Foundation on the internet for info on how to get involved.
Ron Richardson