Inspired by Nicholas Kristof’s latest blog post: The Role of Microfinance

Microfinance is “the most visible innovation in anti-poverty policy in the last half century.” Because of this, many have put such high expectations on the effects of microfinance and the pace at which it can have an impact on ending poverty. Some have even called it the panacea for poverty.

The truth is, microfinance alone cannot end poverty and anyone who is involved in microfinance will tell you the same. But before you start freaking out and withdrawing all of your Kiva credit, let’s look at what microfinance can do.

Microfinance is improving the lives of many borrowers because:

• Microfinance institutions provide credit at a lower rate than local money lenders.
  • Even though the interest rates from microfinance institutions (MFIs) are high, they are considerably lower than local money lenders. This allows borrowers to save additional money.
• Microfinance gives people the opportunity to make large[...]
  
  [Published in NonProfitBlogs - Read the original article]