Micro-American Women Essay

Micro enterprising has helped African women in many ways. New machines make it easier for them to work. They raise money to support their large families and themselves. Some also hire workers, which creates more jobs. Micro enterprising also gives women more opportunities to work and inspires them to start their own business. They help their economy little by little. But most importantly, it gives them pride for being a women; one that went from unable to do anything to working and saving their family.

For Victoria’s case, she needs the money to buy more potatoes and quinoa to make sure her shop has all the proper vegetables (Kiva.org). If Victoria can keep her shop well stocked, she may attract more customers and make more money. By earning more money, Victoria can improve her quality of life. According to Plan Canada “microfinancing can lead to improved access to clean water and better sanitation while also providing better access to health care” (plancanada.ca). Research shows that microfinance loans are better suited for women because they are less likely to miss payments on their loan and it helps them feel empowered (plancanada.ca). By lending to Victoria, she will feel empowered and will be able to support herself and her family. Also, because she is a woman, she is less likely to miss

80% of micro-loans in developing countries are made to women. A large majority of people living in developing countries are in poverty. Most of these people were living off of a dollar a day. Micro-loans have been created to help the people that need them. Women in developing countries are empowered by micro loans and they use that power to help their families, economy and ,gain more recognition in their culture.

“Microcredit is about giving hope” Natalie Portman, (Natalie Portman Quote). Microcredit or microfinance, is the lending of small amounts of money at low interest to new businesses in the developing world, (David Siegel). People argue that microcredit I ineffective. But others disagree and say it’s the best way to win the fight against global poverty. Microcredit is an effective way to fight poverty because it’s easy to obtain, provides stability, and helps people build a new path for themselves.

Micro-loans are essentially the same as traditional loans, just on a much smaller scale. Families living in extreme poverty usually don’t have good enough credit to obtain a traditional

Microfinance is grown to one of the biggest areas in fighting again poverty, it can be discussed, if microcredits are the best option to help people out of poverty. In the past it was almost impossible for the poor population of the world to get a loan with acceptable conditions. Banks would not lend to the poor, because the risk of losing the money was too high for them, which meant poor people in Africa had no chance of getting a loan from big banks. The so called “money lenders” would take advantage of this situation, and give the poor an opportunity to receive a loan. The “money lenders” were not trying to help the poor, they just wanted to earn money, thinking on their own personal benefit. That’s why their loans have insane conditions with interest payments of a couple hundred percent. If someone could not pay back the loan in time, they would take everything from the customers, and maybe even kill them. This was the only opportunity for poor people to get a loan until microfinance was born. Another problem is, that women have been excluded from the banking system in general in some regions of the world, because that was nothing women would do in their culture. In most cultures it was implemented, that women are staying at home, taking care of the house, children, and food. Men would go to work and earn the money for the family needed for the cost of living. It would also be more complicated for women to get a loan, because they traditionally work less than men, and

Although micro lenders and conventional lenders both lend money, their motives differ greatly. Under the terms of micro lending, the main goal is to enhance the

Studies of the impact of microfinance in more than 24 countries have found high improvements in household income levels (Carr, 2002). Access to microfinance allows the borrower to reduce costs with lower interest rates and purchasing of raw materials. Income increases as the number of goods or services offered grows and product costs are reduced. Microcredit was initially created in developing countries where extreme poverty percentages are higher, but it also helps developed countries in a significant way. Even though the United States is one of the world’s greatest economies, microcredit helps micro businesses to develop effective financial plans and have an individual as well as collective growth.

Microfinance institutions (MFI) have created intense debates in an industry of traditional banking. Being primarily focused on mission of poverty reduction through economic stimulation of low income areas, MFI have sharpened the credit policy to specification of area of interests. The major distinction is loan interest rate being notably higher in comparison to profit orientated financial institutions (Rosenberg et al. 2009). The reason roots in excessive cost of funds and administrative loses faced by growing industry. As noted in Cull et.al (2009), interest paid by borrowers represents the struggle of MFI to overcome the burden of expenses and achieve financial sustainability. The latter however, can be reached by altering the capital structure of MFI through diversification of source of funding or rejection of capital which can lead to malfunction. As soon as the changes are implemented, institutions can proceed to expansion reaching increasing return to scale and beneficially affecting sustainability. This essay would focus on the role on subsidies in performance of MFI. The rationale behind exploring this form of noncommercial capital is that total amount of subsidized capital in MFI reached almost 16 billion in 2009 (Bloomberg, 2012) posing a question regarding the alternative and probably more efficient use of respective funds to support poor. The second reason derives from the number of researches discussed later,

Despite the growing body of literatures about the microfinance and its impact on poverty, there are counter growing criticisms against microfinance in issues such as reaching the poor, unchanged poverty level, high interest rate, brutality in repayment processes, financial sustainability, and women empowerment. (Hossain, 2010).

For example, some women use their microloans to create a family business based on local crafts. It is said that that “for every 100 taka lent to a woman, household consumption increases by 18 taka; interestingly the figure is 11 taka if the same amount was lent to a man”(Amin, Rai, and Topa). Although critics argue that loaning to women is not a shortcut to gender-equality, it is undeniably a step in the right direction. Some studies say that only 45% of loans given to women stay solely in women`s hands; yet, studies indicate that the very act of receiving a loan allows a woman to have more say in the household which, in turn, leads to the furthering of education and sanitation (mircoCredit). This supports the idea that loaning to women is not merely an investment in an individual, but an investment in a family. For example, Runi Mamun, of rural Nowapara, Bangladesh, uses her microloans to help the family. With only $1,000 worth of loans, she has started a jamdani (decorative sari) weaving business, which employees her family members, and bought a cow. On a more personal note, her newfound economic independence has earned her respect in her community. She plans not to marry unless her suitor is as financially stable as she (Burns). This ideology is a drastic departure from the male-dominated ideologies that pervade these rural, impoverished areas. In addition, the Grameen Kaylan

Microfinance, has to some extent improved and strengthened relations amongst women within communities. Microloans provided to women in groups ensures that the economic burden of repayments is one which women no longer have to bear alone but is instead shared, reducing the anxiety and pressure levels felt by women. The lending of microloans to groups of women, has created a sense of social solidarity, as women who are often in the same financial position can all contribute to creating successful microenterprises monitored and controlled by each other, reducing the risk of financial failure and collapse in addition to the reduction of collateral. This can be viewed as a

It is said that a good deed can brighten even the darkest of worlds. Opportunities to help others can come in a variety of ways and each is important, in its own respect. While microfinancing and charitable programs both have their respective benefits, in certain circumstances one may be more appropriate than the other. Charity should be implemented in times of emergency because it provides short term aid with no strings, prevents banks from capitalizing on tragedy and provides massive aid, whereas microfinancing loans should be utilized so that individual borrowers experience long term assistance and so that jobs can be created in impoverished areas.

As of July this year, $880 million dollars have been lent through Kiva, a popular crowdfunding website for micro-finance loans, since its founding in 2005. That same year, the United Nations Economic and Social Council declared 2005 the “Year of Microcredit” to emphasize the importance of providing financial services to the world’s poorest in an attempt to lift them out of poverty. The idea is simple: instead of donating to charities that provide some services to people in poverty, micro-credit organizations could just lend poor people the money they need to start or expand their own enterprises and then they will both lift themselves out of poverty with the growth of their business and repay the loan with some interest. These micro-credit institutions thus have the goal of simultaneously achieving financial sustainability, a positive social impact, and significant scale to lower costs. Micro-finance expands on the idea of micro-credit to include other useful financial services such as savings, money transfers, business education or insurance, depending on the institution. While the intentions of these institutions were undoubtedly good when they were founded, not all have maintained practices that have an actual, measurable, impact on poverty reduction. Micro-finance has the capacity to be a successful means of poverty reduction, but we need to look further into the actual practices and assessments of these institutions to make the millions of dollars being put into them

Girls and women understand the immediate problems facing the society. They are in direct contact with the societal issues and problems. The history of microfinance and how it was founded is a clear indication that women have a lot of influence on development. Microfinance was founded in Bangladesh and the main player was the women (Sparke, 2013). Women were expected to get loans at small interest and use it to initiate fight poverty. The women, during that time they did a wonderful job. It is not until 2005 when the greedy multinational such as World Bank and IMF intruded into microfinance and turned it into profit-generating enterprise (Sparke, 2013). Since then, microfinance started losing its value.