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December 17, 2010

My fascination with microcredit and its potential to eradicate world poverty

Cover - Small Loans, Big Dreams 2 Microcredit has consumed me. Since being introduced to the concept—or should I say movement—two years ago, I can’t get enough. 

Why my interest in microcredit better known as microfinance? 

First, I am fascinated by the proven idea that small loans—often as small as $40—given to the poor in primarily underdeveloped countries can help to alleviate extreme poverty.  These microloans provide seed capital to mostly poverty-stricken women who use the money to pursue an entrepreneurial endeavor like selling crops or homemade baskets. Profits from their businesses often result in more money for healthcare, education for children, and other benefits. Thus, living standards are improved considerably.  

Also, I believe in the power of entrepreneurship—more than anything else—as a means to attain self-sufficiency and prosperity.  The success of microfinance is due, in large part, to the great possibilities that entrepreneurship affords. 

Finally, just as fascinating are the impressive repayment rates of the millions of loans administered by microfinance intuitions (MFIs). Some funds have a delinquency rate as low as 1.5 percent.  (Read a previous post: “The world’s poorest more creditworthy than Americans”.)  The success of the industry has even sparked the interest of wealthy investors, looking for new asset classes with steady growth and low risk. 

For those who are equally captivated by the promise of microfinance or at least interested in learning more about this innovation, I suggest you read “Small Loans, Big Dreams” by Alex Counts, President and CEO of the Grameen Foundation.  Mr. Counts harmoniously narrates the parallel struggles and successes of borrowers in Bangladesh and Chicago, while interweaving the biography of microfinance pioneer and Nobel Prize winner, Muhammad Yunus. The book is a compelling and honest treatise on microfinance—its pitfalls and promise—but ultimately delivers newfound hope of eradicating world poverty through credit.  

Comments

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Thanks, Bolaji. I will definitely check that out. Thanks for sharing such great information with everyone.

Whatup, Kev:

Thanks for the heads-up on this post. This is a dope topic. I'm familiar with Mr Grameen's incredible story and legacy, thanks to a book I read two years ago.

You should check out Jacqueline Novogratz's "The Blue Sweater". Jacqueline is president of The Acumen Fund.

Her personal story of how she:

Traveled around the world as a young, bright, and optimistic world-changer...

Got schooled to the realities of poor nations, and war-torn countrysides...

How she still kept her optimism, and became a proponent of micro loans...

well, it's inspiring.

My brother-in-law recently met the young Ryan Allis (CEO of iContact), and he apparently is a big social entrepreneur. His blog may be of interest to you >> http://www.RyanAllis.com (He's like a Kevin Johnson on CRUNK juice. LOL!)

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About Me

Greetings! I’m Kevin D. Johnson, a business owner who has recently assumed the role of consumer advocate and internet activist. Atlanta, Georgia is my home.

My Story

Upon returning from my wonderful honeymoon in Jamaica in October 2008, I received what I thought was an ordinary American Express bill, but to my surprise it was a disappointing letter informing me that my credit line was reduced by about 65% for a highly suspicious and discriminatory reason. Considering my excellent credit score and pristine payment history, it just didn’t make sense. However, what does make sense are the unfair and insidious policies that I have uncovered when asking why. It is time to change them.

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I created this web site to document and share my challenging journey to change what is wrong, unfair, and unjust in the credit card industry. The ultimate goal of this web site is to inform consumers of ways to stand up for themselves against treacherous business practices and to educate consumers about how to improve their credit. Finally, I hope to encourage a more open dialogue with credit card companies about their policies–good and bad.

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I am proud to say that this blog's unyielding demand for change led to an important amendment in the final Credit CARD Act signed by President Obama on May 22, 2009. Despite this major accomplishment, there is still more work to be done.

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In an effort to educate as many people as possible about financial management, especially about how to manage the current credit crisis, I have begun to speak around the country at colleges, universities, corporations, chamber of commerce meetings, congressional hearings, trade organization meetings, etc. Having acquired a wealth of information that will help to empower people and to improve their financial future, I feel that sharing this information is the least I can do to make a positive impact. For information on my availability for speaking opportunities, please send an e-mail to Jennifer Silverman at jennifer@silvermanworldwide.com.


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