i lys av Tanketom.net

Or something like that. I’ve never been good with proverbs.

It’s 2008. Development aid has rendered itself useless in many cases, and in many poor countries the gap between rich and powerful political actors and the people, is growing bigger, often helped by a corrupt economic system.

Microloans

A way that has shown some effect in the smaller sense, are the socalled microloans. This is by no means a new idea, as it was put to use already in the 1800s to get people out of living from hand to mouth, and into a more productive economic circle.

The microloans are used where banks won’t give credit, or where the interest rate makes it impossible to do a rational loan. It’s a service to people with an idea, or a will to get out of extreme poverty.

The loans are mainly for businesses, and especially businesses that can handle steady work places, and make societies stay alive.

In Norway, Mohammad Yunus and his Grameen Bank are the exponents of the microfinances, both through the winning the 2006 Nobel Peace Prize and from the troubles with Telenor/Grameenphone.

It’s crucial that the microloans in no way gets considered as aid, or a magic formula to get out of poverty. It’s a loan, and as in all economics, there’s a certain risk to it. In many ways I’d say it has been oversold in the media as a method of getting rid of poverty. Microfinances in not a final solution, but rather an alternative way of thinking. Microloans is a kick start that can help people out of extreme poverty, but certainly not a get-country-rich-quick-scheme.

This is well examplified by Bangladesh and Bolivia, two of the countries where microloans has the largest spread, but still is some of the planets poorest countries. But helping normal citizens to build small economic capitals, can help more children in to the educational systems and thus becoming a huge resource in the long run.

There has been a lot of critisism against these financial platforms, especially from the political left (a side I normally identify with in some way). And it’s true, microfinancing is originally an idea from the socio-economic right. Then again, so is Wikipedia. It’s true that the loans are based on individual earnings and not on collective equality, and that some of these microfinancial businesses still have unfair interest rates and hard collection methods, but as always, one should not invest blindly, but where one finds that it’s right. I find myself being pragmatic.

MYC4

For personal investments in the microfinanses, one of the ways is Danish-based MYC4, that the (Norwegian) blogger pairs Siri og Christian at vindstille.net, and Heidrun og Jan Sverre at skyfritt.com has tried. MYC4, driven by Danish Consul Mads Kjær, is an organization where individuals choose what businesses they want to loan to (from 10 Euro and upwards), and what the interest rate should be. MYC4 claim that 91,4 percent of their loans are being repayed.

For more information about the MYC4, microfinances, risk, consequences for the ones that does not repay, and even more statistics, check out the MYC4 website.

“Don’t cross the road if you can’t get out of the kitchen,” they say. And a microloan could be exactly what helps a certain idea out of the kitchen. How much is 10 Euro to you, anyway?

More about Microcredits, i Objectivist Paradise Wikipedia, and more about Blog Action Day on their own site.

Blog Action Day 2008 Poverty from Blog Action Day on Vimeo.

This post is part of Blog Action Day, a project where almost 10000 websites write about one subject, one particular day, once a year. This year, the subject is poverty.