microfinance

• microfinance is a general term too describe financial services to low-income individuals or to those who do not have access to typical banking services
• microloans loans people money to help them get a kick start  in a small business that they think will be beneficial to their village or town 
• microloans also helps investments in infrastructure, education, and legal reforms (these people are called microentrepenurs) 
• Microfinance provides people who don’t have the money to get a loan to start a business, pay for medical attention, pay for schools, etc.
• It helps small businesses start up and stay running. This helps the local economy it also helps pay for insurance.
  
• If you get sued, the microfinance will help it get started again, or if your small business gets damaged, they will provide you the money to get your business back on track so you can start making money again.
• Microfinance is an opportunity for the less fortunate people to have stuff that they usually would not be able to afford or start up.
  
• Microfinance allows poor people to build their assets, for example by getting land, Constructing or improving their homes and purchasing livestock.              

in most developing countries, the majority of the population are poor, but it is the poor people who are least likely to be helped by regular banks. 

Problems in developing countries that can be helped by Microfinance-

• Malaria 
• Drought
• Clean Water

Malaria is a life-threatening disease transmitted by mosquitoes.  It was once thought that the disease came from fetid marshes, hence the name mal-aria (bad air).  In 1880, scientists discovered the real cause of malaria: a one-cell parasite called plasmodium.  Later they discovered that the parasite is transmitted from person to person through the bite of a female Anopheles mosquito, which requires blood to nurture her eggs.

Every year, malaria causes 655,000 deaths.  Every minute, a child dies from malaria.  

Right now, International Medical Corps is on the ground to combat malaria and help save lives.   

- doctors are trying to figure out how to make a vaccine for malaria.  “An important part of this process is understanding the mechanisms of naturally acquired immunity to malaria.” 

- “International Medical Corps is committed to to fighting malaria around the world through treatment, prevention, and educational activities.  We integrate our anti-malaria programs into all primary health care services.  We work with governments to successfully introduce new malaria protocols and new drug combinations.  International Medical Corps supplies many health centers while simultaneously building the capacity of health providers.”  

• Loans help people with small businesses to get a kick start on what they want to do.
• They may get funds, structure investments, housing, and help for the economy in small areas near by.

• With more small businesses, there won’t be as many large corporations.
• This means that wildlife areas in villages will be healthier because of reduced fumes from factories.

• This means that people will have a better quality of living. Areas that are consumed by large corporations have pollutants in the air and unhealthy living conditions

A microlender is an organization that makes business loans to individuals who are not able to obtain financing from traditional lenders. Microlenders typically charge higher-than-average interest rates; their maximum loan is usually $25,000 or less. Recipients of micro-loans are typically individuals in poverty or in development zones in the U.S., or who live in developing nations.

• Clients are too poor to pay interest as well as repaying the loan capital, so projects have low or no interest rates.
• Clients need a large lump sum to restart activities after a conflict, so loan sizes are large (for example, more than one-fifth of annual income).
• Clients prefer to use the loan for agricultural activities, so projects have long loan terms (six months to one year).
• Clients have often lost all their assets and have no collateral, so projects use group-based methodologies.
• Clients need micro-finance to kick-start their businesses, so projects are impermanent.
• The remit of the organisation is to assist the poorest households, so projects target the most vulnerable households.

At Peace Corps online, there was a simulation of a small village. The objective was to interview every person who had an idea for a small business. There were about five people you could interview. After you gathered all of the information, there was a decision that had to be made. One person’s idea was to be picked in order to get a microloan. The decision was based on our opinion and what we thought was best for the village to help it thrive in the future.

• The climate in the region affects the farming which is relied on in many because they are not as developed as other places.
• The weather is unpredictable.
• Many times there won’t be as much rainfall that is needed for the crops to survive, these times are called droughts.
• Other times there is too much rain, this leads to many of the crops getting washed away because they are already full of water and can’t take any more in.
• Both resulting in little/no crops.

In order to improve microfinance, we need to think of a solution to give people a chance to have a better life. When people need money, they need a loan.This will help them escape poverty. It should be something that people can lean on.Those people can get a loan from people who have money and then once the people who are borrowing can escape poverty, then they can pay the people back.Then the system works because people can get money back and help to escape poverty. A great example of this is Kiva, a website for sharing microloans.

Peace corps volunteers are working on business issues and are focus on increasing family income, improving the environment for business, educating young people, and helping business find markets for traditional products