Microfinance 

Definitions

• Microfinance - a form of financial services for entrepreneurs and small businesses lacking access to banking and related services
• Microloan - a small loan given to individuals who might not have access to typical banking services, usually to start or expand small, self-sufficient businesses

Who provides microloans?

• As of November 26, 2013, Kiva has distributed $498,939,550 in loans from 1,015,823 lenders to 1,177,248 borrowers
• A total of 637,003 loans have been funded through Kiva
• The average loan size is $410.89
• The average Kiva user has made 10.06 loans

Kiva's current repayment rate for all its partners is 99.01%

Who receives microloans?

• microentrepreneurs who are trying to start (or kickstart!) a small business
• villagers needing to fund a clinic, hospital, or other health care facility (malaria treatment, drugs, hypos, refrigerators, sanitation)
• teachers trying to run a school (buying anything from books and pencils to desks and chairs)
• students wanting to further their education (college tuition)

Problems with microloans

• high interest rates sometimes as high as 23%
• The cost of providing banking services to those living in

poverty is high.  Being the company that provides tiny

loans can be expensive

• What’s harder and more time-consuming to process:

one $500,000 loan, or five hundred $1000 loans?   

Microloans are a help, not a cure

• banking services are often unavailable to poor people -

microloans fill a gap

• it’s not just loans, but also insurance, legal representation,

and help with financial planning that become available

• these are all important to people who are trying to break

the cycle of poverty

• but poverty is a huge problem with no easy solutions

Challenges

• there are many challenges faced by developing nations
• some of these can be alleviated through microloans
• substandard education ($ can help purchase supplies, buy books, pay teachers)
• poor health care ($ can help buy supplies, construct new/better buildings, deal with malaria)

Malaria

• It’s a mosquito-borne infectious disease
• humans and animals can be infected through the bite of a female mosquito
• no vaccine exists   :(
• it kills around 665,000 people

a year, many of them children

in sub-Saharan Africa

• mosquito nets can be effective

Philanthropy

• philanthropy is the generous donation of money to good causes, and Bill and Melinda Gates are the second greatest philanthropists in history ($28 billion, ⅓ of their wealth)

• they support research and development for a vaccine, diagnostics, and mosquito-control measures  -  like mosquito nets!