Microcredit and Social Business

Poverty is an issue that has affected society since civilization was first created. Even with a globalized economy and economic opportunity prevalent nearly everywhere, there is still a vast majority of people who live in financial strain. According to recent information obtained by the World Bank, “10.7% of the world’s population live on less than US $1.90 a day”(World Bank 2013). In the United States considered the wealthiest nation on Earth, the poverty rate is 12.7% which is 40.6 million people(US Census Bureau 2016). Though some people are in poverty because of their own choices, poverty is a result of structural institutional practices in place.

We live in a world where technology is advanced and it has solved many of our problems in the past, but an issue that has not been solved is poverty. Poverty is being extremely poor to the point where one cannot afford the daily necessities to survive, like food and shelter. Amongst the many problems we face today such as, war and climate change, poverty is a significant problem we have yet to solve. Poverty cannot be solved in a day nor in a year, in fact it might never be completely solved. Taking the right steps to significantly reduce poverty such as, becoming strict on those who apply for government assistance, donating leftover food for those in need and funding more resources into programs for rehabilitation may help decrease poverty.

There have many attempts to solve the problem of world poverty in recent years. Average people have begun to care and are willing to help with the age old problem. However, the world is making little progress toward the eradication of poverty. Many of the things we are doing, out of the goodness of our hearts, just aren't helping. For various reasons, the typical response to poverty of donating vast sums of money to hurting countries doesn't help the poor near as much as other solutions and sometimes may even make the problem worse.

It is clear that citizens in impoverished nations are stuck in a poverty trap, where they are unable to escape even with the assistance of aid from well developed nations. Many citizens are contributing money to charities because there is a moral obligation to donate if it does not put us into a state of economic instability. On the other hand, no matter how much aid is being given to nations stuck in poverty, this money is not helping any of the citizens. The money is going directly into the hands of corrupt governments and corporations, who constantly use it improperly. This aspect of money misuse is clearly illustrated in Katherine Boo’s Behind the Beautiful Forevers. Boo focuses the book on the impoverished slum of Annawadi, located in Mumbai, India. Throughout the book, Boo shows examples of how the citizens of Annawadi are stuck in a poverty trap because of the country’s inconsistent and inefficient systems, leading to the failure of sustainable growth and poverty reduction to the nation. India is not the only place falling victim to this problem; many other third world countries grapple with the same issues. Other than helping the nations, aid has made impoverished nations circumstances even worse, pushing it into a further state of poverty. The main components of the failure of aid are due to developing countries not having proper infrastructure and institutions, no efficient government, and a dependence on aid.

In both developing and emerging economies, microfinance has vastly and increasingly been seen as one of the most important means for enhancing the lives of the poor and therefore a major tool for economic and social development mostly in rural areas. Lately, contrary to this widespread belief, critics have raised eyebrows against this growing popularity of microfinance as a major tool for enhancing economic development. Contrary to belief, they are of the opinion that microfinance is a ‘make-belief’ that is hindering economic and social development rather than enhancing it.

269). There is no easy way for those with little money to begin earning interest on savings or obtain loans with reasonable interest rates: the banking community is failing the poorest people (Banerjee & Duflo, 2012, p. 269). Also, Banerjee and Duflo (2012) assert that medical and agricultural insurance are not favored by the poor in spite of the fact that they could benefit greatly from such products (269). Their proposed solutions come in the form of microcredit (to provide access to more reasonable loans), electronic money transfer systems (to reduce the fixed costs of saving), and rewarding people for making good financial decisions (either via markets or the government if needed) (Banerjee & Duflo, 2012, p. 270). The incentives could even be something unrelated, such as bed nets, which then help the recipients in more than one way (Banerjee & Duflo, 2012, p. 270). This would need to be coupled with government regulation so that unscrupulous individuals wouldn’t have a way to easily game the system (Banerjee & Duflo, 2012, p. 270).

I have chosen to research about poverty. From the research I have gathered poverty still exists in today’s society. Poverty is inability to be able to get certain needs such us; food, water, clothing, choices and opportunities, not having enough food or not having food at all. Not getting the opportunity to go a clinic, it also means not being able to afford basic needs of the family. Poverty also brings bad health and bad education compared to people who have better life than, people who are in poverty. People who are living in poverty cannot afford the necessary clothing or school supplies, they might not have a way for their children to get to school. Gaining a basic education could bring 171 million people out of poverty (Poverty, 2002). Poverty can make

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.

Micro-loans aid women in developing countries to become more independent from their husbands. Men in poor areas of the world, such as Africa are responsible for working and earning the money for their families. With the use of micro-loans, women become more independent and are viewed differently by their families. Rupert Scofield, Founder and CEO of microfinance institution Finca, insists, “The most empowering thing for women in the developing world is having

Micro credit is the process of helping the “poorest of the poor” obtain loans. Since big time banks rarely help people who need help acquiring loans, micro credit is another source that makes it possible for the lower class to achieve that. They focus on they call the “real economy,” where they are on personal relationships with their clients. They want them to succeed and help their clients change their own life. Compared to the big banks, they are not looking to make huge amount of interest back off their loan (paper chasers).

Seven years ago, Jessica Jackley heard a speech by Grameen Bank founder Muhammad Yunus, an economist from Bangladesh who had developed the idea of microcredit: loans offered to entrepreneurs too poor to qualify for traditional bank loans. She says, "I was so completely blown away by the idea that I quit my job, dropped everything and moved to East Africa to help." In late 2005 she co-founded Kiva.org with Matt Flannery.

In conclusion, we have grown exponentially in these few decades in term of technologies and science. However, our society have not changed much for in term of handling and disposing the non-ending poverty. Many solutions have theorized to end poverty and even Orwell proposes a solution to this dilemma. However, our society have never considered earnestly to pluck out the root of the poverty. Those who suffer from poverty do not have the capacity nor the money to improve themselves. These people cannot even fulfilled their utmost desire to feed themselves preventing themselves to die pointlessly. We must realize “that without money, it's difficult to meet fundamental human needs” (Here’s) and when the fundamentals are not meet, one cannot proceed

What is microlending? In simplest terms microlending is the lending of very small amounts of money at low interest, to low income people in urban and rural areas. It started forty years ago, when a person named Muhammad Yunus was visiting his family and his country Bangladesh which had recently become an independent country. Muhammad Yunus had left his home country then –East Bengal- when he was a child with his parents in search of a better future. He graduated from Vanderbilt University in Nashville, Tennessee, with a PhD in economics. Muhammad Yunus is the founder of Grameen Bank, the first non-profit organization to offer microfinance services in Bangladesh and in the world (New York Times). This bank showed the world on how little

To cite the saying that social entrepreneurship is the best way to help people in need, we would like to provide an outstanding example of social enterprise which is Grameen Bank. Grameen Bank was officially founded in 1983 by Muhammad Yunus and it provides small loans, rather than charity, to the poorest of the poor especially women in Bangladesh. This indeed provides an opportunity for the people to transform their lives. In 2006, Nobel Peace Prize was awarded to Muhammad Yunus and the Grameen Bank for their efforts to create economic and social

Building Social Business is a book about social enterprise written by Muhammad Yunus. Muhammad Yunus is a social entrepreneur, economist, banker, and civil servant leader from Bangladesh. He is known for founding the Grameen Bank which is a microfinance organization and community development bank. Yunus is a well-known proponent of microfinance and microcredit. Due to his efforts in making a change through microfinance and microcredit and other noble causes, Yunus has been given several awards including the Independence Day Award in 1987, World Food Price in 1994, Pfeffer Peace Price also in 1994, Gandhi Peace Price in 2000, Volvo Environment Prize in 2003, Nobel Peace Prize in 2006, Presidential Medal of Freedom in 2009, Congressional