Micro Loans: Powerful Tools For Those In Poverty
Posted on: 16 December 2014
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Poverty is a growing problem across the globe. Approximately 50 percent of the world's total population lives on less than $2.50 per day. Humanitarian efforts all around the world continually try to raise money to help underdeveloped countries get the resources that they need to rise to the top. However, the progress is slow because of political issues, economic issues, and even the climate and culture of certain areas. Therefore, individuals need a way to lift themselves out of poverty when they aren't able to access other tools. A micro loan is one of the best ways to do that, and these loans help save lives and provide hope for families on a daily basis. Here is a brief overview of micro loans and how they can help lift people out of poverty when used correctly:
What Are Micro Loans?
Unlike standard loans, which are traditionally provided by large banks to consumers of almost every sort, micro loans are extended by specific non-profit organizations to those who are truly in need of help. Usually, they are extended to entrepreneurs who want to make a better life for themselves by starting a business to generate revenue for themselves and their families. Sometimes, in addition to the monetary benefits associated with these loans, the person receiving the loan can also get training on how to properly run their business so that it doesn't collapse shortly after they start it. These loans are usually offered in amounts no larger than $50,000. The terms of repayment vary greatly based on the specific needs of the individual, but it is usually easy for the borrower to work with the company extending the loan to pay back the full amount plus interest in a reasonable amount of time.
How do Micro Loans Help Those In Poverty?
As previously mentioned, micro loans are extended to those in great need, and they help them start up businesses that are sustainable and able to be maintained over a long period of time. Usually, these businesses are for things that will benefit entire communities. For instance, a woman in Rwanda was able to open a restaurant in the area where she lived to not only feed the multitudes, but to get money to pay for the basic necessities for her family. Before the organization she received money from gave her her micro loan, she would have had no way to provide for her family, but her income from the restaurant that had been financed through this loan made it possible for her to do so. People just like this woman are being lifted out of poverty by micro loans every day. In some cases, companies have a policy in place where for every donation they receive, they will match or double that amount to fund micro loans in some of the poorest countries. In other cases, you can donate directly to a specific person by checking the list of entrepreneurs who would like such a loan on the websites of micro loan-extending agencies.
Micro loans are beautiful ways to make the world a better place. If you want to start making a difference today and help contribute to changing the lives of individuals or an entire community, then you may want to consider donating to a micro loan company, or you might even consider starting up your own company to help people like this every day.
On the other hand, if you are the one trying to start a business, then you can apply for a business loan at a company like Bank & Trust Company.