Kansascity.com recently wrote about a business named FINCA that helps desperately poor people in 21 countries by providing business loans. I include an excerpt:
Many people and organizations offer assistance to make life more bearable for the poor. The New York-based Foundation for International Community Assistance has a particularly powerful approach: It assists poor people around the world with credit to help them start or strengthen small businesses.
It is a model worth supporting and emulating.
“When we started 23 years ago, it was a dream. It looked impossible loaning money to desperately poor people,” said FINCA International board chairman Robert Hatch, a resident of Kansas City.
It’s an arduous task to help people who live on less than $2 a day and whose low incomes affect their nutrition, health, and ability to send children to school.
With as little as a $50 loan, one client can open a small business. The money is repaid in weekly cycles over three years while the person builds up a vibrant micro-enterprise as well as a healthy savings account.
This exemplifies exactly the kind of approach I want to see. While remaining cost efficient, it helps poor people permanently escape poverty by becoming self-sufficient. I applaud FINCA International!
With loans, we can essentially end poverty for free. In fact, instead of costing money the loaners can profit from it by charging interest. Through mutually beneficial arrangements, both the poor person who escapes poverty and the loaner reap benefits from the transaction. We can set these mutually beneficial arrangements up in a non-governmental way, such that the loans come from private organizations rather than governments. To permanently escape poverty, people need to have access to loans that pay for food, clothes, shelter, and healthcare while it pays for education (including job training) and then job placement (including starting a business if applicable). These services must be of the highest quality; so that the person earns enough from their employment (including self-employment) that the person can repay the loan with interest while also paying for food, clothes, shelter, and healthcare. Then, not only has the loaner profited (which enables them to then loan to another person), but also the recipient of the loan has profited so much they can both escape poverty and live debt-free.