Microfinance loans demonstrate a great way to fight poverty and hunger without government interference or state socialist ideas.
The limited amounts of these effective loans proves that the problem lay in the lack of opportunity available to the poor and hungry. Additionally, the fact that these are loans and not monetary gifts, but rather loans that must be repaid, shows that fighting poverty and hunger doesn’t involve impossible costs.
Take, for example, the story of Noni Bala Ghosh, who revived her business and escaped poverty with a $50 loan.
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It all started with $50. In 1988, that’s what it took Noni Bala Ghosh to revive her family’s business of making sweets to sell in Kholshi, her tiny village in Bangladesh.
Family members had given up the business because they could no longer afford to buy milk to churn into rich, thick chhana, a milk-derivative that is used in making candy and many sweets.
Driven to despair, Noni heeded the advice of several women in her village who had taken loans from Grameen Bank, a non-profit lending organization that developed the poverty-busting lending program known as “micro-credit,” in the 1970s.
Through a series of small loans from the bank, she soon bought a cow and began to supply her own milk, and eventually engaged her two sons and husband, Gopal, to help support the family business she led. After 3 1/2 years, Noni had become the key supplier to a prominent sweets shop in Dhaka. Once again, she could afford to feed and clothe her family.
Though $50 seems like a relatively small amount to most, it can be the key to breaking out of poverty once and for all for the more than 1 billion people in the world who are living on less than a dollar a day.
Since its beginning, the micro-finance model of providing small loans to help expand or start a self-sustaining enterprise has helped more than 8.2 million of the world’s poorest people — in at least 115 countries — to stand on their feet. (Watch women in Mexico fight poverty — 2:49)
“I never thought it would reach so far,” said Dr. Mohammed Yunus, the founder of the micro-finance system. He first learned of its ability to change a poor person’s outlook on life when in 1976 he decided to lend a total of $27 to pay off the loan-shark debts of 42 villagers in rural Chittagong, Bangladesh.