Micro-Finance: a type of finance that should grab your attention!

Micro-finance is a buzz word at the moment. It’s tossed around aid and development circles as common lingo, yet it’s become popular so fast that we’ve somewhat bypassed our understanding of what micro-finance actually is!

A very basic definition of micro-finance can be found on the website of The Grameen Foundation, often considered the champions of this concept. They say Microfinance is a proven tool for fighting poverty on a large scale. It provides very small loans, or micro-loans, to poor people, mostly women, to start or expand very small, self-sufficient businesses. Through their own ingenuity and drive, and the support of the lending microfinance institution (MFI), poor women are able start their journey out of poverty.”You can read more about micro-finance and their work here.

As the definition says, it is a proven tool for fighting poverty on a LARGE scale. So how can we in Australia get behind this? There are many ways to support micro-finance projects, a couple to look into include Opportunity International and Kiva, but a new initiative that I wanted to briefly mention was World Vision’s new See Solutions 

Hugh Jackman, an ambassador for World Vision’s new project See Solutions, recently wrote an article for the Sydney Morning Herald about the importance of economic empowerment. The article drew on Hugh’s own experiences on a recent trip to Ethiopia, meeting a man named Dukale, now involved in a World Vision coffee cooperative. Thanks to World Vision, Dukale has been economically empowered to provide for his family’s daily needs, and also to save for the future.

The power of this new initiative of breaking the poverty cycle is summed up by Hugh in his concluding comments,

History has shown development is possible, but not inevitable. Our challenge in the developed world is to help people to be more productively involved in the economy, to raise themselves out of poverty, and achieve a life with choices for their children – all without handouts. From what I have seen, economic development projects do work. They are the best answer to one of the biggest social issues of our time.” 

You can read the article here and learn more about See Solutions at the website. I believe this initiative is very effective because a particular focus is given to women as playing a vital role in breaking the poverty cycle. This solution also provides a hand up, rather than a hand out, the latter often not providing sustainable solutions to issues, and often resulting in a backslide into poverty.

Tomorrow afternoon (Sunday, 19th September) a documentary, ‘Seeds of Hope’, about Hugh’s trip with World Vision will be shown on Channel 9 at 4pm. I strongly encourage you to watch the documentary if you’re near a TV – and for a teaser, check out the clip below!

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