Why does microfinance matter? It’s not a panacea solution. It doesn’t build global multinationals. It won’t singlehandedly dissolve poverty.
But let’s talk for a second about what it is, what it does, what it can do. Microfinance is about people. It boldly proclaims, “I see where you are today, but I believe in where you can go tomorrow.”
Hearing a woman’s story in Bangladesh a few years ago, I remember the big smile that beamed across her face as she recalled her past and how it looked so different from her present. Having nothing more than a dilapidated shelter, her husband, and her growing family 20 years earlier, this woman took out a loan from a local microfinance organization to open a small store.
Twenty years and numerous local cycles later, this woman owns two small pharmacies, employing everyone in her family, including her husband & sons – something unheard of in her culture when she first started out. She has a stable roof over her head with a latrine inside, and was even able to pay for her children to go to the university.
So why does microfinance matter? This story from Bangladesh is why microfinance matters. Because people matter. Because dignity matters.
It’s true, microfinance on its own isn’t going to drive huge increases in GDP; it won’t create hundreds of jobs per enterprise. But it can increase dignity, promote innovation, and provide economic stability for those who participate in its programs
This focus on people is what gets me excited about microfinance. Very few other development tools have the capacity to uplift men, women, and families in the way microfinance can. It doesn’t promise success, but opportunity is guaranteed. It places responsibility and creativity in the hands of loan recipients. The outcome is transformed communities.
So while microfinance may be but one tool in the development bag, it’s one my team and I are proud to support, discuss, and participate in. We get to see every day how microfinance is transforming lives, not by focusing on handouts or charity, but by challenging men and women around the globe to use business as a means to create a better life.
Opportunity. Innovation. Dignity. Hope. People. This is why microfinance matters.