Microfinance- A little can go a long way

I've been doing some research on the field of Microfinance-simply it's the lending of small amounts of money to entrepreneurs around the world-and it's history. In Canada (and the rest of the developed world) businesses borrow thousands and millions of dollars every day in order to build their business and grow into better companies. This is what our banking system is designed for and for the most part it works very well (Let's ignore recent events)

Microfinance uses this same principle but on a much smaller base. Instead of loaning $100,000 most microfinance loans are under $5000! This is designed to help the small "mom and pop" businesses in places like Peru, Kenya and Cambodia. All places with a minimal banking system outside of the major cities.

Grameen Foundation is one of the early pioneers for this. Others have followed quickly once Grameen proved that rather than being a charity, it was a viable and profitable business!
visit their website www.grameenfoundation.org for more details

I've found many businesses in the business of microfinance. Kiva is an online business that allows you to lend as little as $25 US. It's all rather ingenious if you ask me and well worth your time to investigate further. www.kiva.org

In Canada there are more than I can count. VanCity Credit Union runs a great website with links to other places (Grameen included) at www.microfinance.ca

I came across MEDA, which appears to be run by the Mennonites and offers you a Promissory with options for 1, 3, 5 and 10 year terms with moderate interest on your investment at maturity. 2% for 1 year is pretty darn good given the current interest rate environment!

Now I can hear your questions, "How safe is Microfinance to invest in? Won't I just lose my money?". Well in some cases it's possible you could have a default and not get your money back. But numerous studies show that Microfinance actually has BETTER rates for payment than loans in the developed world. Kiva gives you all the default and deliquency information right on their website. But like anything, do your homework and make sure you keep up to date on it.

Microfinance is well worth your time. That small little amount you donate can help increase living standards for an entire family in another part of the world.