Notes for Microfinance Quiz

microfinance- a form of financial services for entrepreneurs and a small businesses lacking access to banking or related services 

microloan- a small loan given to people who may not have access to a typical banking service 

• usually to start or expand small, self-sufficient businesses 

 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!
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 recieves 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 help

• 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)

speaking of malaria... 

malaria

• comes from the phrase "bad air"
• 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
• (Thank you, Bill Gates)
• Bill and Malinda Gates have the most amount of mosquito nets