World Ark Magazine - January/February 2009 - (Page 16)

like taxes, and by the relative scarcity of microfinance lenders. alex Counts, Ceo of grameen foundation, calls it “a monopoly situation.” Competition helps. interest rates tend to be lowest in countries where microfinance lenders have been around the longest and are the most numerous. More thAn Money as microfinance becomes a more established practice, lenders are finding that in addition to providing funds to entrepreneurs, microcredit can be used to address other issues facing the very poor. a Swedish woman named ingrid Munro, who started the microfinance institution called jamii bora in kenya in 1999, discovered that of the borrowers who were defaulting on their loans, most were doing so to pay the hospital bills of a family member. none of the insurance companies she approached would insure her borrowers at rates they could afford, so she worked with a local mission hospital to create an affordable plan—often just a few cents a week—for her borrowers. as a result, some 120,000 of Munro’s borrowers and their families are now Loaning to women produced better results for the family than loaning to men, perhaps because women were more directly involved with providing for their children. covered through the mission hospitals. The plan has had the happy side effect of providing the mission hospitals, which were struggling financially, with an influx of funds. in a similar vein, the Microcredit Summit Campaign, run by daley-harris’ reSulTS educational fund, started a pilot program in india to provide health education to borrowers through their microfinance lenders. while money lending and health education might seem an unusual pairing, it actually makes good sense: health educators can take advantage of the microfinance lenders’ infrastructure to easily reach many more people than they might have otherwise. and from a financial standpoint, because poor health threatens financial stability, improving people’s health can make them more likely to pay back their loans. A Money MAker? Visionaries first embraced extending credit to the very poor as a way to end poverty. but as microcredit grows in popularity, it is increasingly becoming a way to generate income for investors. The chasm between these two schools of thought is narrower than one might think, in part because lack of capital is a major barrier to the growth of microfinance. if microfinance becomes just another investment, microlenders might finally have access to the funds they need to reach millions, or even billions, of people. but some fear that as microcredit becomes marketdriven, the loans will fail to make it to the very poorest people, who tend to be the most expensive to reach. Microfinance programs dependent on investors may become www.h ei f er .o r g 16 j a n uar y / feb ruar y 2 0 0 9 | world ark http://www.heifer.org

Table of Contents Feed for the Digital Edition of World Ark Magazine - January/February 2009

World Ark Magazine - January/February 2009 Contents Letters For the Record The Good Life Asked and Answered Microfinance: A Lot for a Little Business is Buzzing in Honduras The World Grows Smaller Mixed Media Heifer Spirit Heifer Bulletin Calendar First Person

World Ark Magazine - January/February 2009

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