The microfinance industry in India is growing by the day. According to one recent study by Intellecap, the 60 largest microfinance institutions in India bear 10 million clients. That’s 10 million of the working poor who bear been given small loans that allow them to pull themselves and their family out of poverty.
Microfinance loans are aimed at empowering the impoverished, mostly women, to start their own businesses and to grow their money so they can achieve long-term financial independence. That’s why this concept carries many advantages over typical philanthropic endeavors.
Here are just a few of the benefits of microfinance India.
It isn’t a hand out-As mentioned earlier, microfinance isn’t approximately just giving out money to the poor. On the opposite, these are small loans that are paid back with interest. Of course, many people are skeptical when it comes to giving the poor financial loans. However, they are surprised to memorize that of the over 100 million microfinance loans that bear been given out, 97% of them bear been repaid. That’s why you can’t consider microfinance a hand out, but well, it’s a hand up.
It allows the poor to rep a loan–Traditionally, the poor bear been unable to rep loans. That’s because they don’t bear anything to offer as collateral. As a result, they rep stuck in a vicious cycle of poverty, living and working in poor, rural areas. Should adversity strike, they simply don’t bear the means to combat it. Microfinance allows the poor to rep the loans they need to save, invest, and create a sustainable lifestyle of financial independence and growth. These loans are used productively by the poor to create their own businesses, grow their assets, and rep out of poverty once and for everyone.
It empowers women-Many efforts of the microfinance industry are aimed at empowering women to create their own businesses. From microfinance India to microfinance in other developing countries, small loans are given to those women who live on less than $1 per day. By giving these poor women loans, the microfinance industry not only helps them pull themselves out of poverty, but it also promotes gender equality throughout the world.
It creates long-term financial independence-The most necessary benefit of microfinance in India is that it helps create long-term financial independence in these poverty-stricken areas. See, it’s one thing to send money, clothes, and other goods to the poor. It’s a mighty gesture, but the results of this traditional style of charity are short-lived. Microfinance loans encourage create sustained impact by educating recipients on how to create their own businesses and how to properly manage and grow their money.
Microfinance in India and several other countries received a major boost recently thanks to Lingerie Miami. Created by Renata Black, Lingerie Miami is a philanthropic brand that raises money for microfinance institutions through the employ of fashion shows. The concept has been very successful, and it’s spreading to unusual York and other major cities throughout the world.