Empowering Entrepreneurs at the Bottom of the Pyramid through Micro Lending

Written by Harsh Jegadeesan on 10:46 AM

In my opinion, the most audacious goal for the world in the 21st century is to alleviate poverty, a global problem that is ubiquitous and enduring. Extreme poverty is a result of a complex inter-play of various social, economic, political and historical factors. Poverty translates to lack of education, basic sanitation and health care facilities in large communities across the globe, leading to a huge economical disparity in the society. Till now, the solutions to alleviate property have had little impact to say the least. A concerted effort from government, non-governmental agencies, for-profit corporations and individuals, coordinated by UN agencies is required to address the problems of global poor.

There are complaints that for-profit corporations are busy chasing profits, but that's what they are incorporated for, exist for. CK Prahalad's book "Fortune at the Bottom of the Pyramid" has shown the way to alleviate poverty through profits. Muhammad Yunus's Grameen Bank through its financial innovation - "microfinance" - has showed that microfinance and entrepreneurship at individual communities can be an effective tool to address poverty.

I truly believe that micro loans - loans of small amounts made to a borrower with no collateral and credit worthiness - along with grassroots entrepreneurship is the way forward to alleviate poverty. At least it is much better than short-sighted subsidies doled out by politicians to garner votes among rural and urban poor. While the governments, NGOs and businesses have a part to play, can you and I do something?

Yes we can. We can make a difference by lending to entrepreneurs in a community to create small businesses. Micro lending platforms such as Kiva, RangDe and DhanaX have made social lending easy. Agreed that the loans have no guarantee of repayment and there is a risk of capital loss, but the total loan is raised through aggregated borrowing from various lenders, substantially reducing the risk.

Make a difference, give them a chance!

I am inspired by the "Starfish Story"
Checkout my Kiva lending profile: http://www.kiva.org/lender/harshjegadeesan

  1. 1 comments: Responses to “ Empowering Entrepreneurs at the Bottom of the Pyramid through Micro Lending ”

  2. By Ashwin on February 27, 2009 at 10:38 PM

    Hi Harsh,

    Good to find you on the web!! If you don't know me - I am Ajay's class mate.

    Btw, I would like you to check www.rangde.org too... It is an Indian version of Kiva !!