Microfinance and the Reduction of Poverty

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Imagine that someone lives in the States, and this person’s local bank just offered them a one-hundred dollar loan. What do they do? Do they scoff? Do they ask if there has been a mistake and then ask to speak to the branch president? The fact of the matter is, if someone received a loan for one hundred dollars in a developed nation, it would do nothing to lessen his or her worries. It would not go particularly far in providing food or clothing for their children, let alone provide them with an education. It is just a c-note; and without a few more of these greenbacks, little can be done in any developed nation. However, through a movement known as microfinance, a small piece of paper is going a long way for the world’s poorest people. Living on less than one dollar a day, citizens of countries like India and Bangladesh are seeing their dreams come true with a loan in an amount that many Americans throw away on shoes or sunglasses. Microfinance is having a positive snowball effect throughout the world; current estimates speculate over 150 million of the world’s most destitute populace have benefited from these loans (US Congress 45). Improved infrastructure, financial stability, and socio-psychological well-being are the key benefits that determine micro lending is the single most effective method in improving the quality of living for the world’s most impoverished people.

In years past, infrastructure in third world countries has been minimal. Residents have starved and perished from treatable and preventable illnesses. These impecunious citizens have been unable to provide an education for their children furthering their hardships and oppression. Microfinance, however, is bringing opportunity for better infrastructure such as t...

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... on International Monetary Policy and Trade. Hearing, The State of Microfinance: How Public policy and Private Funds Can Effectively Promote Financial Inclusion for All. 111th Cong., 2nd sess. Washington: GPO, 2010. Print.

---. State Dept. Bangkok. Embassy. “Creating a Thailand Without Poverty”. By Chavapas Ongmahutmongkol. Web. 24 Mar. 2011. .

---.---. America - Engaging the World - America.gov. By Burton Bollag, Special Correspondent. 01 July 2010. Web. 28 Mar. 2011. .

---. United States Agency International Development. Ecuador. Bursting Micro-finance Sector in Ecuador: Challenging Poverty from the Bottom. United States Embassy. Web. 28 Mar. 2011. .

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