Monday, June 7, 2010

Microloans paragraph from Poverty Reduction wiki article

From the article Poverty Reduction:

See also: Microfinance

One of the most popular of the new technical tools for economic development and poverty reduction are microloans made famous in 1976 by the Grameen Bank in Bangladesh. The idea is to loan small amounts of money to farmers or villages so these people can obtain the things they need to increase their economic rewards. A small pump costing only $50 could make a very big difference in a village without the means of irrigation, for example. A couple of hundred dollars for a small bridge linking a village to a city where it can market farm products is another example.[50][51] A specific example is the Thai government's People's Bank which is making loans of $100 to $300 to help farmers buy equipment or seeds, help street vendors acquire an inventory to sell, or help others set up small shops.

Micro-enterprise Development adds teaching of basic financial principles and general business training before providing loan capital, thus is very practical and sound approach to fighting poverty. This approach is advocated by Five Talents as the way to ensure that entrepreneurs and their communities benefit now and in the future with documented success stories[52]"

Can the microloan concept work well in the US for poverty reduction? Is it already being tied? Will need to take a look around.

- S

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