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Would You Consider Becoming a Micro-Lender?

Nov 20, 2007 Authored by Lee Rabe | Category: Mission

Can a $50 loan really make a significant impact on a person's life? Absolutely!

Have you heard of microlending before? It was begun by Muhammed Yunus. He began an amazing effort to give small loans of $50, $100, or $200 to the poor in developing nations. These are people who would never qualify for traditional lending. However, they are working poor, eager to build their business and improve their lives.

While $50 may seem small, it is important to remember that the working poor typically live on less than $2 a day. To them, a $50 loan is roughly equivalent to an entire months' income. With that extra income, they can buy supplies or equipment that can help them start new businesses or earn more income from their existing businesses.

Even a small increase in income can make a difference in their lives. First and foremost, extra income can help a poor family meet basic needs: rice and vegetables for a daily meal, kerosene for cooking, or mosquito nets to prevent disease.

Hopefully, receiving a first loan is often only the beginning of an ongoing process. Successful loan repayment allows borrowers to take out additional, and often larger, loans. This helps them expand their income even further over time. A steady and increasing source of income, however small, reduces a poor family's vulnerability to the vagaries of their precarious existence. They can often begin to save money for the first time, providing a financial safety net against unexpected problems. Savings also allow them to access new comforts and services that can improve their living conditions. For example, a mother might be able to afford to let her children go to school instead of sending them off to beg in the streets or work in the fields. Or it might allow a family to save enough to replace their plastic roof with one made of tin, or fix a long-broken window. In this way, the small sum of $50 could be the difference for a poor woman between destitution and a secure future for herself and her family. It can provide security and hope, allowing her to fulfill her dream that her children will live a better life than she could have ever imagined for herself.

Here's where you can be a part of this global revolution: www.microplace.com

Thru their unique service, you can literally become someone who lends to the poor with a return of approximately 2-4%. That's the same rate as a savings account in a local bank. Realize that there is not an FDIC insuring these loans. However, it's interesting to note the repayment rate is over 95%.

In other words, investing a portion of your savings will change families and entire communities while earning a rate comparable to an average savings account. It's a practical way to serve the poor by simply shifting how we live.