There was a very interesting story about microfinance on the BBC news website yesterday. Microfinance is a term used in which a financing body to provide poor people with a small loan - usually less than $100 - in order for them too start up a business or help a business to grow. The practice originated in the late 1970’s, although there was evidence of it before this time, it generally didn’t pass the following 2 key factors:
- provides financial funding to poor people through a market based enterprise without the need for subsidising the venture
- demonstrates that poop people can be relied upon to repay any loans taken out
The article demonstrates that it is women who benefit most from this practice of lending as:
‘Women tend to invest in three things: health, their children’s education and the home, she says. Men, on the other hand, put more back into the business.’
Traditionally finance does not cater for women - who make up some of the worlds poorest - usually due to unfavourable terms or the fact they are usually on a small scale, however they can make a huge difference to women, not just in developing countries but also developed countries like the UK.
The article reports that
‘Mirofinance helps give women an income and dignity’.
It also helps women save for the future, provide more for their children and provide local employment to others. Read the full story here.
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