-- Muhammad Yunus
In 2005, I traveled to Moldova to teach economics, leadership, and business skills to a microfinance organization. I was able to meet many people there who have directly benefited from micofinance loans and have been a fan of these loans as a great way to help the poor ever since. I realize microfinance has limitations, especially in areas without secure property rights, but it remains one of the best ways to use your money to directly help the poor. Nobel Prize winner, Muhammad Yunus was the pioneer in this field and recently wrote a book entitled Banker to the Poor: Micro-Lending and the Battle Against World Poverty.Here is a review of the book by J.D. Roth:
Muhammad Yunus, who won the Nobel Peace Prize for 2006, is a Bangladeshi banker and economist. Born and raised in Chittagong, he came to the United States during the 1960s to study economics. He returned to Bangladesh to teach at Chittagong University in the early 1970s, but found the poverty around him at odds with the material he taught in class.Read the whole thing and watch this video showing more about Grameen Bank and the work they do.It’s this delineation between economic theory and economic reality that makes Yunus’ story so compelling. Instead of ensconcing himself in an ivory tower, discussing economic policy based on ideas, he chose to put these ideas into practice, to see how they worked in the real world. There’s a big difference between fighting poverty in theory and fighting it in fact.
Yunus found that most of the poor people in the villages around his university didn’t lack initiative, but only lacked opportunity, opportunity that existing financial institutions were not prepared to grant. Yunus established the Grameen Bank to help the poor help themselves.
If you'd like to personally get involved with donating money to a microfinance organization, read this New York Times piece You, Too, Can Be a Banker to the Poor and visit Kiva's website:
Kiva lets you connect with and loan money to unique small businesses in the developing world. By choosing a business on Kiva.org, you can "sponsor a business" and help the world's working poor make great strides towards economic independence. Throughout the course of the loan (usually 6-12 months), you can receive email journal updates from the business you've sponsored. As loans are repaid, you get your loan money back.Here's a PBS video showing how Kiva helps people donate money to lend to those overseas in need of microfinance loans:
Microfinance is truly a great way to help others in an way that has positively aligned incentives. It is great to see organizations like Kiva emerge that help connect much needed capital to those who need it the most.
Ali gave me a copy of Yunus' book several months ago. It's about time I started reading it.
See some more of my related posts:
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