article Link: Why We Do Micro-Savings: Micro-savings vs. Micro-finance
This is a very interesting article that presents a different take on micro-finance and a solution to some of the problems associated with it.
The article is from a blog at Food For the Hungry.
Microfinance is an idea that’s been around for some years. Basically, you lend poor people, who would normally be unable to get credit, small amounts of money, in the hope that they start businesses with them and thereby lift themselves out of poverty. The amounts are small and people don’t need traditional security (savings, property, regular income) to prove they can pay it back.
But the unpleasant truth is that credit still needs to be repaid, otherwise none of the institutions which offer it would still be in business – when in fact, they’re amongst the biggest organisations in Bangladesh. Microfinance is an enormous business – nowhere more so than in Bangladesh, where it was born in the 70′s.
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