Financial Consortium To Alleviate Global Poverty

So improving financial services and financial systems in part can help alleviate global poverty?  Certainly!  Microfinance allows for more businesses to run,  which leads to more job creation, increasing economic growth, and thus reducing the number of people living in severe poverty.  The concept is fairly simple.  Check out this video!

-Georisa Chang
SOURCE: Consortium on Financial Systems and Poverty

Microfinance: New And Improved!

Recently, microcredit system is being modified in different ways in order to improvise the system for better and become more accessible to needy people. One example is Farz Foundation’s microcredit system in Pakistan. Unlike the original idea, this system does not provide credit to poor people; rather it provides a person with raw materials along with the specific skill that will help him/her to become self-sufficient. The system believes that there is always a room for innovation to be introduced to already existing structures as there is always the danger of spending the credit on the items of daily use rather than sustainable work opportunities.

The system works in this way: a woman is provided with the necessary material and skill to successfully run a business of any kind (say, making and selling artificial flowers). What works in this case is the fact that instead of extending credit, she is being provided the raw material along with the skill. Not only business facilities, but also other options could be added to this system such as, the provision of health and education facilities to the community so that each individual keeps on learning during this process. Farz Foundation believes that by adopting this method, microfinance becomes a well-organized business as well as a community services, and incidence of default is reduced to the minimum level. At a time when the world economies are shrinking, and people at large losing their jobs worldwide, this method could be used to offset the impact of recession in the developing world.

Farz Foundation claims that, this method carries a significant potential that can be confirmed by their success rate of 80% in various projects. The program is now limited to some regions of Pakistan and is still in its experimentation process. But there is no denying the fact that the program has considerable potential as a tool to reduce global poverty if utilized in other parts of the developing world.

-Nisha Noor

SOURCE: FARZ FOUNDATION

Fighting Poverty With Microfinance

Roshaneh Zafar is an American-educated banker who fights extremism with microfinance in Pakistan. Roshaneh, an inspiration to anyone interested in developing Pakistan, has dedicated her life to empowering some of Pakistan’s most impoverished women and giving them the tools to run businesses of their own. Roshaneh’s objectives align with one of our key talking points, which is to alleviate poverty in order to reduce the likelihood of terrorists/extremists from preying on the poor in these areas. Roshaneh is the “warrior” on the ground doing just this. She is helping to create jobs and educational opportunities for hundreds of thousands of Pakistanis. “Charity is limited, but capitalism isn’t,” Roshaneh said. “If you want to change the world, you need market-based solutions.”

Roshaneh founded the Kashf Foundation in 1996 to provide microloans to poor people so that they can buy a rickshaw or raw materials to start a tiny business. Despite a few setbacks, Roshaneh persisted and has since dispersed more than $200 million to more than 300,000 families. Furthermore, a study found that after 4 years, Kashf borrowers are more likely than others to enjoy improved economic conditions. And according to the journalist Nicholas Kristof that is exactly what he has seen over the years during his visits to Pakistan.

The main takeaway point from this story is something that we can all relate to, which is this: “helping people start businesses, create jobs and support education is a potent way to undermine extremism. We Americans overinvest in firepower to defeat extremism and underinvest in development…The toolkit to fight terrorism includes not only missiles but also microfinance and economic opportunity.”

In my opinion, taking heed of this message is absolutely necessary for peace to be permanently brought to this region. Additionally, the U.S.’s public perception of extremism (or terrorism) has often been distorted by media sources, and the above message is a refreshing challenge to the public's perception about who is an extremist and how they should be handled.

- Clare O.

SOURCE: New York Times

Kiva.org Co-Founder Speaks at TED

Jessica Jackley, a co-founder of the online microfinance community Kiva, is trying to change the way we think about people in poverty. Many people will relate to her perspective, especially her attitude towards people in poverty prior to founding Kiva. She thought that "they" need "our" help. After actually meeting a handful of people we would term as "in poverty," she realized that her attitude was wrong. They did not need help that would only turn into dependency. Now she believes that instead of the haves and have nots, the lines should be blurred. We should not think of giving as a transaction or a way to make ourselves feel better. We should not distance ourselves from people in poverty. Check out the above video to hear her story as well as the stories of the entrepreneurs that changed her attitude towards poverty.

-Kelli Hanson

SOURCE: TED

Microfinance Helps People Help Themselves

Vinod Khosla, the billionaire venture capitalist and co-founder of Sun Microsystems, was already among the world’s richest men when he invested a few years ago in SKS Microfinance, a lender to poor women in India. Since then, Khosla has an extra $117 million to his name. He says he plans to dive into other ventures that focus on fighting poverty while trying to spin a profit. Khosla plans to start a venture capital fund to invest in companies that focus not only in India and Africa, but elsewhere by providing education, health, and energy services.

Forbes estimates that India now has 69 billionaires, up from seven in 2000. Khosla challenges them to do more to help their country's poor. India is also amongst the world's poor.“It surprises me that in India there is not a tradition of large-scale giving and helping to solve social problems and set a social model,” Mr. Khosla said.

"Mr. Khosla said it might take at least a year to set up his new venture fund. He intends to finance it from his SKS profits and then return to the fund any profits from subsequent ventures it backs (www.nytimes.com)."

Microfinance plays a huge combating role in developing countries. The business of giving to poor entrepreneurs. Not only does it provide jobs, but it creates much needed sustainability which optimizes alleviation of global poverty where possible.

-Shereen Alibhai

SOURCE: NY Times

Spreading Technology to Empower the Impoverished

The Grameen Foundation, a D.C. based organization is doing its part to combat global poverty through the use of microfinance and technology. In 2006, the organization's founder, Muhammad Yunus, was awarded the Nobel Peace Prize for his microlending work with women in Bangladesh.

Since then, the Foundation has expanded to include the Grameen Technology Center, located in Seattle, WA. Here, a team comprised of past employees from some of the world's leading technology companies is working to enable global development in impoverished communities. They are doing this by utilizing the power, accessibility and affordability of cellphones.

Grameen has helped hundreds of expectant mothers in Rwanda by sending them check-up reminders and pregnancy tips in the form of text messages. Last year, Grameen launched a new program in Uganda to provide farmers with useful information about crop trends. Through a partnership with Google and a local telecom service provider, Grameen collects data about weather and crop disease and then sends it to local farmers via text message. "Tech is an enabler, not the end goal," said David Edelstein, vice president of technology for Grameen. "It's about putting information into people's hands and empowering them."

-Devynn Patterson

Source: "Aid groups using cellphones to reach the world's poor"-The Washington Post

MasterCard and Cisco Support Grameen Bank Efforts to Expand Services

The Grameen Foundation announced its plan to expand it use of technology in the microfinance initiative with the support of MasterCard and Cisco Foundations. This support will allow micro-finance institutions (MFIs) to automate their operations, while providing a common platform for the microfinance industry in general.

$1.23 million from MasterCard will help fund the Mifos Platform, which will work on enhancing mobile payment systems and improving the integration of the Progress out of Poverty Index - a globally recognized poverty assessment tool that the Grameen Bank utilizes to assess their effectiveness.

Improving the technology of MFIs will hopefully create a more cost effective avenue to reach more people, and track their movement out of poverty.

-Michelle Leung

Source: PR Newswire

MDG #3 - Promote Gender Equality

The above video highlights Millennium Development Goal #3 - Promoting Gender Equality.

2/3 of the world's population living on less than $2 per day are women. Why? Because they are often given fewer opportunities - education being one of them. Statistics have shown that educated women have fewer children, earn a higher income and invest more into their families health - all of which are vital for a countries economy.

World leaders from around the globe have come together in an effort to make gender equality available to all women and girls through such efforts as education, micro-credit, and better political representation.

To learn more watch the following video posted on YouTube.

- Tiffanie Depew

SOURCE: YouTube & End Poverty 2015

Today at the Borgen Project...

Today at The Borgen Project we were granted the company of a previous intern from the Haiti-based micro-credit institution, Fonkoze. Georgina Allen spent 6 months interning at Fonkoze and enlightened us with her many experiences of working with the Haitian people as well as her experiences of the impact micro-finance loans have made in the lives of the people who receive them.

Fonkoze was started in 1995 by a group of just 32 grassroots leaders and has since grown to to 765 employees, with over 54,000 loan clients.

According to Ms. Allen the efforts of Fonkoze has enabled many to escape the abject poverty that once afflicted their lives But she also cites that much work still needs to be done to promote the economic sustainability that is currently lacking in the country of Haiti - most notably, the energy and transportation infrastructure that hinders long term progress.

To learn more check out their website: Fonkoze.

- Tiffanie Depew

SOURCE: Fonkoze

Microfinance Success

Here is a featured piece on microfinance enthusiast Muhammad Yunus. Yunus has done a great deal to help eradicate poverty in Bangladesh. He started a small business loan organization for people too poor to borrow from traditional banking systems.

Yunus went beyond the normal scope of lending money and began uniting the people needing loans into groups. The idea behind these groups was to motivate one another toward success in their enterprises and encourage speedy repayment of loans. The loan groups have proven more than successful with a 98% loan repayment rate in Yunus' bank. The burden of debt weighs heavy on all of us and Yunus makes the load a lot lighter with his unique support groups.

Additionally, micro-lending is becoming easier than ever with sites like Kiva in which you can lend money online and even track the recipient's progress as well as your own repayment schedule. Pretty neat.

-Nick Mohazzabfar

Sources: IndiaMarks.com, Kiva.org

tiny assistance → BIG CHANGES

The United Nations Refugee Agency will be partnering with the Grameen Foundation in providing micro loans to tens of thousands of displaced refugees around the world. Such a project will combine the resources of the UN and the vision of Nobel Peace Laureate, Muhammad Yunis will be provided with microloans in order to start their own business and become economically self-sufficient. The values of micro credit are innumerable...they provide recipients with more than money. Recipients of micro loans are given the dignity of having the control over their own lives.

"Micro-finance is important because by allowing people to run their own businesses and learn new skills it can help the displaced – especially women – become self-sufficient and also prepare them if they return home, integrate them in a host country or help them start a new life in a resettlement country."

The Grameen Foundation and its partners are credited with providing micro loans to millions of people around the world, giving individuals the chance to escape poverty by providing them with training, managerial skills, and technical assistance in order to increase their employment and income.

- Tiffanie Depew

SOURCE: UN News Centre

The Girl Effect

The Girl Effect, n.

"The powerful social and economic change brought about when girls have the opportunity to participate in their society."

WHY GIRLS?

Because when adolescent girls in the developing world have a chance, they can be the most powerful force of change for themselves, their families, communities and nations.

But while those 600 million girls are the most likely agents of change, they are invisible to their societies and the world. If you're ready to learn and do more, head over to girleffect.org.

- Tiffanie Depew

Source: YouTube

Jamii Bora Micro Financing

The Jamii Bora micro financing institution provides opportunities for thousands of people in Kenya to turn their lives around. Their vision is that with a little bit of help, people, no matter how poor they are, can make their way out of the poverty cycle.

Jane from the Mathare slum, three miles outside of Nairobi, is one woman who was able to improve her situation with a loan from Jamii Bora. As a single mother of two, who had not been able to raise the funds to go to school, she had a limited skill set. However, she did not let that stop her and made a living by altering gowns to sell in her neighborhood. With some start up capital, she was able to start a lucrative business. Although she was making four dollars a day, which is a large amount for the slums, she was still stuck in Mathare without an opportunity to find better and safer housing. Recently, Jamii Bora opened a low-rent housing development in a safer location designed to aid people like Jane.

With small investments, micro finance institutions and non-governmental organizations can make big changes in many peoples lives.
--Jessica Milstead

Source: ted.com

Expanding Microfinance

Microfinance has proven to be very effective in helping individual families rise out of poverty. With a small loan provided by other people through organizations such as kiva.org, an individual or group of entrepreneurs can start a small business. They repay the loan with their profits, and earn enough money to help feed their families. The success of this strategy has sparked has sparked an interest in microfinance on a larger scale, "growth finance." Instead of small loans to individuals, growth finance would provide loans between $50,000 and $1 million to entreprises in developing countries in hopes that it would help lift the country out of poverty. Last month, a conference was held to discuss the possibility of carrying such an ambitious project. Read more about it here.

Microfinance Helps Individuals

The December 2004 tsunami in Banda Aceh, Indonesia, destroyed thousands of lives and left many people without a home or a job. Yuli's family was one of the few who lived through the ordeal, but were left with nearly nothing. After the tsunami, Yuli opened up a small kiosk to sell baked goods made by other local women, while her husband struggled to earn money as a driver. When she heard about the Grameen Foundation, she took out a loan for $100 with which she was able to buy more goods to sell, and thus increase her daily profit. She is now quickly on her way to repaying the loan, with plans to take out a bigger one later to build a bigger shop. With the help of the loan, she was able to improve her family's situation, keep her children in school, and start saving up money for a house.
Source: Grameen Foundation