Monday, January 5, 2009

Microfinance and Economics

Wouldn't it be radical if when failing companies cry poverty, instead of socializing greed and bad management with bail out packages, they are given direction to the opportunities to raise capitol via micro-financing? Wouldn't it be neat if instead of a tax refund Americans were given certificates or loan vouchers to be used in a targeted program along the lines of a regional micro-finance?

Kiva.org is an example of one of the greatest innovations I have seen in my life time. As a growing number of investors find meaningful reward lending in this way, micro-finance is gaining momentum.

Organizations like Kiva are part of the present and future that can be scaled up to weave the economic fabric that risk-avoidant traditional financiers can not. This development serves the entrepreneurial spirit that fortifies economics and communities. Fascinating.

Kiva.org has a global mission to end poverty. They have lent over 6 million dollars in small sums ranging from 300-5000 and have aggregated the lending pool to meet funding needs of entrepreneurs all over the planet.

I am curious from a systems perspective how this technology can be used in economic stimulus at home. What do you think?

2 comments:

Ryan Calkins said...

Rachel,
Radical indeed! And your idea of using microfinance as a mechanism of economic stimulus seems like a great one to me. In particular because it would be money into the hands of people who would use it for productive ends--for things that would help them to grow their own business, create new jobs, etc.
Ryan
www.seattlemicrofinance.org

Dave said...

I am a doctoral student at George Washington Univ. This semester we are studying leadership and I'm beginning to put together a paper. I'm thinking about writing something about how microfinance enables leadership in a community. I'm wondering if you have any suggestions on how I could further research this topic and narrow the topic down. Thanks!