Microlending: The Cure for Third World Poverty

I have a husband who measures his success with the yardstick of goodness. At the end of the day he needs to feel the world is a better place for him having been it. Cynics might scoff, especially since he is an executive for a for-profit company, but he honestly has a philosophical and spiritual need to contribute. Like Sky Dayton, who founded EarthLink in 1995, Tom has visions of connecting friends and families throughout the world with internet technology. His vision transcends access and encompasses life-transforming technologies and applications which are just beginning to surface. He sometimes torments himself because as with everything in life, where there is good there is evil. On particularly bad days, he brands himself “purveyor of smut,” but then it’s my job to remind him of all the knowledge, empowerment, and efficiency the internet generates, which in my mind clearly outweighs the porn, predators, and scams.

Tom’s career path has been greatly influenced by the need for safety. We are by nature risk-averse and have never had the gumption to start our own venture or forego a steady, generous paycheck for something less sizable or reliable. With four college funds to grow, four sets of teeth to align, and four bodies to clothe, feed, and shelter, we’ve chosen for him to work for solid companies with great people, pay, and benefits. Others we know have openly embraced their desire to improve the world by taking far riskier paths. A good friend from college spent many years in South America working to create sustainable microlending models, a trend we have since learned much about. Under the tenets of microfinance, organizations loan small amounts, often less than $100, to individuals (almost always women) in developing nations to help them start businesses. A woman in India might receive a loan sufficient to buy a goat. She may then use the milk from the goat to feed her children and sell the excess to repay the loan. Once the loan is repaid she might take out a second loan to buy a second goat. With the additional profits, she might buy a used sewing machine and begin mending her neighbor’s clothing to generate an additional income stream. Within a matter of months, she will have gone from economic powerlessness to self-sufficiency. RSO, mentioned in the last post, is rapidly increasing the loans it makes in southern India and has a 100% repayment rate.

Tom’s cousin Josh married a brilliant woman last year who is completing her dissertation at the business school at UNC-Chapel Hill and has been actively involved in microfinance in the field and in the classroom. She was the third person in our little world who had made microcredit part of her personal mission. We began to think it a strange coincidence until last month when I received an email from a high school classmate with a link to Time’s Top 100 cover story of May 8, 2006. It seems my high school class president, with whom I attended a dance our senior year, is one of the 100 most influential people in shaping the world and is doing it through microlending in India. (Vikram Akula). His company, SKS Finance, is now funded by Unitus, a microfinance accelerator. Now we’ve gone from coincidence to downright eerie. We feel there must be something we can contribute to the field and hope that our trip will help us figure out what it might be.

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