Micro Loans and The Girl Effect

by | Oct 4, 2011 | Business | 14 comments

5 years ago I had never heard of Micro Loans, but the moment I did, I knew it would never leave my heart.

The concept of granting small loans to help an individual start a small business made my heart sing. I know I wouldn’t have been able to start my first thriving business without all of the help and support I received through a self employment program. And while listening to hundreds of entrepreneurs’ dreams in the past 15 years, I know that often the only thing keeping someone from starting their dream business, is just a few hundred dollars in start-up capital. (And usually someone to believe in their dream, with them.)

Believe in the dream + Start up capital

It can be as simple as $50, and requires such little effort.

But a bank really isn’t in the business of “risk lending”. With failure rates of small business so high, it’s not in their best interest to go through a lending procedure, to loan “the small guy” a few thousand dollars, and certainly not for a few hundred dollars.

So then, the next place we tend to go for loans is Friends and Family. But this isn’t always the best option, or even feasible.

What is a guy or girl to do, if she has a dream but very little extra money at the end of each pay cheque?


And what if you live in a country where there is hardly even enough money for basic living expenses? Where school is a luxury, and young girls get married when they’re still young girls? Start new families of their own, and become responsible for raising a young family.

It becomes a cycle. A cycle where possible seems completely impossible.

If you didn’t get a chance to watch the short video I posted yesterday, pop over here now – but come back to read the rest in a minute!


But there is a way! Micro lending
programs connect people with heart, passion and some extra money, to people with a business dream. I’ve seen loans for $50 to purchase fabric and supplies, or a goat that supplies milk to the home, and a bit extra to sell.

And the statistics are staggering – in a really good way.

 

STATS

Today, more than 600 million girls live in the developing world.

(Population Reference Bureau, DataFinder database, http://www.prb.org/datafinder.aspx
[accessed December 20, 2007].)

 

When women and girls earn income, they reinvest 90 percent of it into their families, as compared to only 30 to 40 percent for a man.

(Chris Fortson, “Women’s Rights Vital for Developing World,” Yale News Daily 2003.)

When a girl in the developing world receives seven or more years of education, she marries four years later and has 2.2 fewer children.

(United Nations Population Fund, State of World Population 1990.)

I don’t have accurate statistics on this one comment, but I have heard that over 90% of microloans are repaid in full. Higher than any traditional corporate lending company (or bank) would expect to receive!


My personal experience with Micro Funding started with a trip to Ecuador, with the eWomen Network.

In 2008 I went with Sandra Yancey, and the eWomen Network to spend a little time talking with women in Ecuador who were part of MicroFinance programs through CARE. Being invited into their community & spending time hearing their stories, finding out about the amazing changes in their communities and connecting – it was an amazing experience.


Shopping in one of the collaborative shops in Ecuador – eWomen Network & CARE

 

There are several organizations connecting people together to manage the process of Micro Loans. (Just do a quick google search and you’ll see what I mean.)

 

You can even get involved by directing a corporations money into one womans hands, through an innovative program


Or, by getting involved this week with The Girl Effect. It’s a movement that’s taking place starting today, October 4, 2011 and running through to October 11, 2011

There are many ways you can get involved. Will you try one today?

  1. Watch these videos
  2. Share the videos and this blog post with your friends on twitter, Facebook or Google +
  3. Do your own research about micro-finance or micro lending
  4. Comment below & share your story. Do you have a dream that could be sparked with just a small loan? Or are you able to help someone else create a sustainable lifestyle business? Tell us how you’ll take action today.

Thank you so very much for reading today. I know how busy you are & how valuable your time is. I know that setting aside time to write this post has cracked me open again. I feel that in some small way, I’ve taken steps again towards making a small difference.

Thank you so much for being here with me! ~ Loralee

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14 Comments

  1. Christie Halmick

    Loralee – thanks for adding your experience with microloans to the Girl Effect discussion. It is amazing what we can do, so easily, to help girls have a better life.

  2. Alara Castell

    So love Kiva! It feels so good to give back. It’s so small of a donation and it makes a big difference in their worlds. Love how you tide in the micro loans with Girl Effect. So awesome. I always love being educated by you and the knowledge you have. You are amazing!

    xoxo
    Alara K. Castell

  3. Jennifer Peek

    I love the idea of micro-loans. It is amazing how little “capital” is really needed to help women in developing countries start their own business – money to buy animals or a sewing machine or pottery supplies. They are breaking the poverty cycle just like the Girl Effect is doing. Thank you so much for making this connection!

  4. Tanya

    I would love to hear more about your experience in Ecuador! How cool is that!? Not only are you contributing money but you are also experiencing the issues first hand in person! Awesome!

  5. nasrine

    Really enjoyed reading this story and your journey to see your funding in action. TO actually meet the women and communities that miro lending is effecting is a remarkable story to tell and I am grateful that you have shared it here. This Girl Effect campaign is trilling and so wonderful. I really believe this project will enhance many. With Respect for you and this wonderful post! N

  6. Laurie Rosenfeld

    Loralee, what I love about microloans is that they let the recipient know that we believe in them and we stand behind their dreams. They are much more personal than bank lending and they evoke a partnership- rather than welfare-mentality. Thanks for sharing statistics and insights and your own trip to Ecuador! How exciting!

  7. Laura Gates

    Thanks Loralee, I love that this post is not how we can go in, dump large sums of money on a country that seems to have little or no impact on the underlying issue, but instead is about empowering women by investing in them to invest in themselves. Clearly your commitment to entrepreneurship is global thanks for the informative post!

  8. Tracy Matthews

    Loralee, great post and go Micro loans. I was able to obtain a loan to start my first business and having seed money like that helped me propel! I am so glad that the Girl Effect Campaign is happening and I am hopeful that many micro-loans will be given to these women.

  9. pat novak

    This is really wonderful to give attention to micro-loans. As you point out. the banks don’t really understand this type of loan. And yet the difference it can make! Now, with the World Bank paying attention with their report “Measuring the Economic Gain of Investing in Girls.”
    We may see more help in the economic sense The Girl Effect makes!

    • nasrine

      That World Bank Report is exciting! I am thinking that the game and the players are upgrading themselves BIG TIME!

  10. Claire Kerslake

    Thanks for a great post Loralee. What a great feeling it is to know that it is possible to make such a huge difference.

  11. Denise Duffield-Thomas

    Micro-loans are changing the world and in this climate of donor fatigue, giving a micro-loan FEELS so different – I feel empowered and part of a community when I loan through Kiva.
    Thanks for breaking this down for us Loralee – going to Ecuador must have been amazing.

  12. Kathleen

    LOVE Mircro loans! And LOVE this story, Loralee! What an adventure for you to actually go to Ecuador to support this cause! When I first heard of micro loans in particular for WOMEN… women in Bosnia and Afghanistan and Ethiopia. Women who banded together in a business venture to bring food and clothing and education to their families and new abudance to the tribe… I KNEW this was one of he most important activist movements I could get behind. I have sponsored some. And I will continue to do so.

    My imagination just LOVES the idea of me being here working on my startup… while supporting and being connected to other women around the world doing the same. Taking back their lives. Becoming the financial strength their families. And influencing the whole tribe through it.

    LOVE! Thank you for sharing! both this movement and the Girl Effect. These are the efforts I am going to continue to support in my life. Perhaps next trip… I come with!!

  13. Stormy

    Micro-loans are an amazing tool for supporting women. I learned about them in college and have been a big supporter ever since – albeit more in word than money. You’ve inspired me to put my money where my mouth is today and support someone. Thank you for your post!

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