Exactly what is microfinance? It has been described as village banking, loans for the poor, and even barefoot banking, but it always includes providing small loans for those who live in poverty to start or expand their own businesses. The most powerful dynamic is the fact that after the initial money used to make a loan is repaid, it is then re-loaned time and time again, multiplying the impact as much as 100-fold! Now you understand why it is said that donations given to microfinance outreaches are truly gifts that keep on giving.
"The poor stay poor not because they are lazy, but because they have no access to capital.”
Milton Friedman, 1976 Nobel Prize
Microfinance initiatives around the world have proved that there are millions of impoverished people who given the opportunity are capable of working their way out of poverty with the help of a small business loan. This has worked the world over, but is particularly relevant in sub-Sahara Africa, where poverty is at the highest levels and the cost to lift a life out of poverty is remarkably low. The tremendous success story of how microfinance has transformed Bangladesh, at one time one of the poorest countries in the world, has served to underscore the fact that it is possible to invest our giving in ways that will have a profound and lasting impact on the poor.
Microfinance embraces an empowerment mentality, as opposed to the “old school” mentality of perpetual donor-funded programs that create dependency among the poor rather than empower them for long-term change and success. Our methodology must embrace a total commitment to the empowerment of the poor, and likewise a commitment to never again engage in misguided activities that create a welfare mentality in the minds of the people we are trying to help, enslaving them to handouts.
“We have a mandate to help transform the poor with a “hand-up”, not a “hand-out”.
Bill Epperhart Founder of Tricord Microfinance
To eradicate global poverty will require the concerted efforts of governments, aid agencies, NGOs, and business-based initiatives like microfinance. Some of these entities work on a “macro”-level, launching huge projects that deal with infrastructure and national programs. Microfinance however, operates at the “micro”, or grassroots level to effect change within families and communities. It works hand-in-hand with the poor, daring them to dream and providing them with loans and the basic business skills needed to start up or expand their own businesses. We believe every human being, including those who for generations have been trapped in poverty, have gifts and creative ability given them by God, and with our encouragement they can begin to tap into their potential.
Economic development through microfinance can take place in every town and village in Africa. Literally millions of lives around the world have been impacted through microfinance services, with hundreds of millions more waiting for their chance. Our vision in Tricord Microfinance is to help as many as possible get that chance, as we strive to alleviate poverty and bring spiritual transformation in our generation.