Microfinance is not yet another form of charity
The term microfinance covers the provision of financial services as a whole to the poor. This includes microcredit, microinsurances and savings too. The best example of Microfinance has been given by Nobel Prize Laureate Muhammad Yunus in Bangladesh.
What is now Grameen bank started with an experiment by Prof. Yunus in 1976 to lend his own money to the poor villagers of Jobra and turned small entrepreneurs. From such a small begining the bank has grown as an institution serving 7.4 million borrowers.
Micro Entrepreneurs pay their debts: only a 2% of loans end up in default. Microfinance is an important engine for economic development. Through micro credit we can empower entrepreneurs in emerging countries to redefine their economies and fuel economic growth.
As explained in my recent article investing in microfinance is profitable from both a social and financial standpoint: a number of investment funds did return higher profits than money market funds, if with a slightly higher risk.
Through this website I intend to provide further information on this topic to the public and to my students in our Investment Management class within the University of Wales MBA at Robert Kennedy College. Our students can find more information about the RKC direct support to microfinance and RKC Kiva lending group here