Microfinance is the Future

I attended a lecture last night by Mohammed Yunus, the man who is credited with starting the Microfinance movement with the Grameen Bank in Bangladesh.

Yunus started the bank in 1976 while visiting the poorest households in the village of Jobra near Chittagong University. He discovered that the Jobra women who made bamboo furniture were taking out loans with very high interest rates from loan sharks. He made his first loan of USD $27.00 from his own pocket to 42 women in the village and the rest is history.

Today the bank provides financial services in the form of small loans to 7.3 million people, ninety-seven percent of which are female. The loan recovery rate for Grameen is very high at 98.35 per cent, proving that the poor are credit-worthy. He won the Nobel Peace Prize in 1996 for his work as "Banker to the Poor" (also the title of his book). You can read about Yunus on the PBS site in the "New Heroes" series.

Microfinance is alive and well in Chicago, too. ACCION Chicago has been operating locally since 1994 as microfinance organization, lending nearly 14 million dollars to 950 local businesses.

Hot tip: You can make small loans to people in developing countries over the web through Kiva.org