Microfinance

Today I selected to be in the group that is dealing with starting a microfinance group at BYU. To be perfectly honest, I knew little to nothing on the subject, so I thought I would do a little research an enlighten myself. Here's what I found:

Microfinance is the provision of financial services to low-income clients including consumers and self-employed, who traditionally lack access to banking and related services. Such services will attempt to help poor people out of poverty.

It's object is "a world in which as many poor and near-poor households as possible have permanent access to an appropriate range of high quality financial services, including not just credit but also savings, insurance, and fund transfers."

The problem is most banks traditionally do not provide financial services (such as loans) to clients with little to no cash income. Therefore, microfinancing allows these people to receive financial help, whereas they would normally not be able to do so.

Due to slow progress in developing quality saving services for poor people, peer-to-peer platforms have developed to expand microlending through individual lenders in the developed world.


Kiva is such an organization, which facilitates about $5M in loans each month. Kiva "empowers individuals to lend to an entrepreneur across the globe. By combining microfinance with the internet, Kiva is creating a global community of people connected through lending."

For our project we will be looking to create a microfinance group at BYU, thus helping connect students to this realm. It seems like an exciting project. I can't wait to learn more!