The Microcredit Revolution
Dr. Muhammad Yunus won a Nobel Peace Prize in 2005 for identifying innovative means of getting loans to people who need them the most. By profiting from small unsecured loans to entrepreneurs in Bangladesh, he proved that poor people make good credit risks. And microcredit lending was born.
Low income borrowers may not have much collateral, but they make up for it with an abundance of incentive. Empty pockets don’t necessarily suggest a lack of skills. Thanks to Dr. Yunus, growing companies in poor countries now have access to the type of resources they could once only dream of.
Kiva.org
Kiva.org is a website which allows individuals to make microcredit loans to worthy entrepreneurs using Paypal. Unlike charity, Kiva lenders can expect repayment of their loans. This allows people to invest once, and then use that capital to help improve a series of small businesses all around the world.
The Future
The World Wide Web gives merchants new tools to bypass institutional roadblocks that have stymied the free flow of commerce for generations. Corrupt governments present less of an obstacle because they no longer own all channels of communication within their country. Now sellers from economically disadvantaged regions market their products on Ebay, use Paypal to collect payments and obtain small loans through Kiva.org.
Facebook has plenty of devoted Kiva fans. Individual investors use their capital assets to develop long distance commercial relationships limited only by the quality of communications. These innovations make information technology infrastructure critically important to developing communities’ chances for prosperity.
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