Microfinance is widely recognized as a sustainable solution in alleviating global poverty; indeed it offers financial services (such as loans, savings and insurance), together with personal development training, to people living in poverty.
Microfinance organizations focus on those with the greatest needs – those who have been displaced, those who live in rural areas, those who traditional institutions consider unbankable – the most marginalized people. Maintaining that focus, microfinance can help create a world in which the underserved have fair access to economic opportunities and the hope to move beyond poverty.
Microcredit organizations make it a priority to serve the particular needs of women, since a disconcerting 70% of all those living in extreme poverty are female. That’s because women are often excluded from education, workplaces, owning properties and equal participation in politics; even if they produce one half of the world’s food.
The greatest opportunity for interrupting cycles of extreme poverty is considered to be investing on women, since when improving their circumstances, they also improve the lives of their children. By investing in nutrition and education, they help to create a better future for their children and their communities.
An important part of Microcredit is the recycling of funds. As loans are repaid, usually in six months to a year, they are re-loaned. This continuous reinvestment multiplies the impact of each dollar loaned on defeating global poverty, and changing lives.