What Am I Doing (Part I): Microfinance?

While microfinance is quickly gaining popularity as a tool for economic development and poverty alleviation, I realize that many people still do not know much about it. Honestly, I don't really know that much about microfinance; I'm doing research to learn more. But let me try to explain briefly what it is.

Microfinance really got started in with the Grameen Bank in Bangledesh in the 1970s. Muhammad Yunus, an economics professor, started the bank and won the Nobel Peace Prize last year for his efforts. Microfinance involves giving offering financial services to poor people. In particular, I am interested in microcredit, the giving of small loans to entpreneurs to start and grow businesses that support their families.

As the microfinance industry has adopted best-practices models (basically models that aren't looking to give away charity money), microfinance institutions tend to feminize their client base. Women often present less of a credit risk. They tend to repay their loans at greater rates and are less more likely to spend their income on their family's well being than men. Still, men take microcredit loans and run small enterprises in the developing world. I am studying the men in microfinance, which I will talk more about in my next post.

Good night.