A Microentrepreneur Walks Into a Community Lending Organization…
This could sound like the start of a bad microfinance industry joke, but in all seriousness, I have a question to ask. A small business owner is in need of a loan. Let’s say it’s the owner of a childcare business that’s located in a house on the outskirts of town. The business, the sole source of income for the owner and her husband, recently unemployed, is in peril of shutting down. She needs just enough money to repair her toilet, so that the childcare center can meet basic health codes. The business is the woman’s life, and provides her with so much pride.
The business is located in Pakistan. Would you lend $25 to this woman?
The business is located in Lawrence, Massachusetts. Would you lend $25 to this woman?
Regardless of your decision in each scenario, my point should be clear: the face of microenterprise in the United States is not remarkably different from microfinance abroad. While microfinance organizations (MFIs) like ACCION USA may make larger loans than its international counterparts and operates in a formal economy, our common mission is to empower people through access to capital at a fair price, provide the tools needed to build a sustainable business and therefore employment, income, pride of ownership and of community.
So why, then, should U.S. and international MFI’s not be united under a common platform such as Kiva? Lack of financial education and consistent employment opportunities in low income communities are primary reasons that people cannot break out of poverty. Microfinance has effectively addressed these issues in the U.S. by educating borrowers and supporting businesses that provide self-employment opportunity, family income and much-needed jobs.
At ACCION USA, we support Kiva’s work in the United States— where poverty is a real, measurable problem. Millions of families nationwide are marginalized, without access to adequate health, educational, and financial resources. Likewise, millions of business owners cannot access traditional or fairly priced credit. Thanks to Kiva, many more entrepreneurs will become aware of MFIs and their life-changing loans . Kiva represents a huge step in reaching scale in the U.S.
Tags: kiva