02 January 2012

we are gonna' talk a bit about micro finance this week

(ps- i have no idea what is going on with my font size today.. it's being stubborn as blazes. So I guess set your screen on enlarge and laugh with me, okay?)

so, you know that Billy and are spending this year at Turame MicroFinance in Bujumbura, Burundi. But we still get lots of questions as to what a micro finance bank actually is. I know is a bit of an anomaly to some of us in the United States with no real understanding of how micro finance works. It's a bank - yet it's somehow tied to an NGO -

this week let's visit again what microfiance is and how it helps the people here in Burundi coupled with photos from a lending group I was fortunate enough to visit. Today I'm recopying a description I found on MarsHill's website because I think it explains the concept very well - so forgive me if you've read this already... but I thought it well worth the reading to offer again.

In Burundi, Africa, one of the biggest hurdles in alleviating poverty is lack of capital. Yet, after a decade-long civil war, only a small percentage of people in Burundi have the collateral required to obtain it. Sitting at 166 out of 169 on the Human Development Index [which ranks countries by health, education, and income], the Burundian people are near to the world’s poorest.

Yet, there is hope. Turame Community Finance is a microcredit institution with pre-credit preparation trainings designed to increase a client’s capacity for credit policies and procedures. This training, combined with a social guarantee between members of the same group, serves in place of collateral, to open up the opportunity to obtain a microloan.

The loan application process begins by a potential Turame client submitting a business idea. Those who are approved receive a small amount of funds [typically around $60] to help build their business and generate a profit. With the profit earned, clients are not only able to pay back their loans but also provide for the needs of their families. One small loan impacts multiple lives.

Microloans provide the poor with the opportunity to work themselves out of poverty. Their small businesses are a permanent, sustainable means for independence instead of on-going reliance on external aid. As businesses grow, livelihoods improve, new opportunities are realized, and dignity is restored.

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