Hi Friends! Last summer I wrote a paper on the state of Microfinance in the US. I have used statistics and success stories from India and a little bit of Bangladesh, where Microfinance has been a huge success in reducing poverty. The success of Microfinance especially in Bangladesh is so phenomenal that it has moved a good percentage of population from poverty to lower middle class. The purpose of my paper was to come up with suggestions on how can we use those success stories and the successful business models in the microfinance industry in the US, where poverty has been increasing since 1990.
I would be really happy to hear your views, queries, or anything you want to say. Please read on.
The lack of demographically inclusive business models in Microfinance is one of the reasons that the problem of poverty, in the United States, has not been addressed constructively. Poverty is not a phenomenon of only developing nations. According to the US Census Bureau, 14.3% of the population or around 43 million people were in poverty in the United States as of 2009. Welfare programs such as food stamps, unemployment benefits, and cash aid have not proved to be beneficial in raising the economic standards of people in poverty. Microfinance is becoming an area of study for several academics around the world after the success of the Grameen Bank from Bangladesh and Kiva.org from the United States in improving the economic standard of people and moving them out of poverty. Microfinance has become the mantra for rural development in the third world countries and it has been seen in Bangladesh where Grameen Bank has its base. Microfinance has been recognized as “an important liberating force” and an “ever more important instrument in the struggle against poverty in not only the Indian subcontinent such as Bangladesh, India, and several African countries but also in the developed world such as the United States.” Successful business models of micro-credit programs can be applied in the United States that would aid in bringing people get out of poverty, similar to what was done in the developing world. Micro-credit has been proved to be the best tool to date to assist developing entrepreneurs around the world to enable them rise out of poverty into self-sustainable business.
