not a hand-out
Microfinance — also called microcredit, microlending, or microloans
Microfinance is a proven, highly successful economic development tool used to help alleviate global poverty. The term “microfinance” refers to the practice of providing financial services to hardworking people with no collateral or credit history. IAS couples these small business loans with business training and accountability to help ensure each recipient’s success.
Microfinance stimulates growth in economically depressed areas
Microfinance loans foster small-scale entrepreneurship and act as a hand-up in situations where a hand-out is not advantageous. Small loans give impoverished individuals the working capital they need to start or grow a business. With one in five people worldwide surviving on less than $1.25 a day, the need is great.
Microfinance leads to:
- More education
- Improved diet and nutrition
- Better health
- Community empowerment
- Resilience in the face of disasters
- The ability to self-sustain and help others
Kyeremaa Comfort is now an accomplished farmer thanks to your assistance
Kyeremaa Comfort is a widow and mother of three in the Brong Ahafo region of Ghana. Since receiving her microfinance loan, Kyeremaa states, “I have applied the knowledge gained from the IAS business training and added it to my years of farming for others. I can boast of the well-being of my children and grandchildren now; they are receiving a quality education,” Read additional microfinance success stories here.
Current microfinance shortage:
- Only 3% of the estimated global need is being met
- An estimated 16 million people access microfinance today
- 500 million more people could potentially benefit
Microfinance benefits ripple out to families and communities
As a business generates profits, small loan recipients build assets, save money, and are able to provide for their families. If a business expands to hire additional employees, then the entire community gets an economic development boost. Once repaid and recycled, microfinance loans help family after family lift themselves out of poverty.
IAS America’s poverty-fighting edge – breaking the cycle of poverty
Microfinance gives hardworking people the opportunity to move from dependence on aid to financial self-reliance — empowering them to change their lives and the lives of their children. However, small loans by themselves are not enough to end global poverty. But when interwoven with other IAS poverty-fighting efforts like business education, clean water, sanitation and health care; the result is sustainable access to life’s basic needs and prosperity for entire communities.