As a form of socially conscious investment, microfinance is an increasingly popular option for people who want to do something good – and there is plenty of scope to get involved. One study by Unitus found that up to 80% of the potential microfinance market had still not been reached, so there is clearly still a lot of work to be done. A lot of this is due to the fact that the key targets of microfinance charity are primarily poor, rural and often hard to reach.
So, if you are interested in micro loans as a means of helping some of the world’s most disadvantaged people, how can you get involved? One of the main routes into microfinance is to support a microfinance charity or other lending institution . Supporting an established microlending organisation is a good idea as it means the money you put into it is more likely to have a positive effect and reach the people the schemes are intended to help.
There are quite a lot of different microfinance charities around so it is definitely worth doing some research to see which one you’d most like to get involved with. For example, you might like to get involved with a charity that works in a particular country or region of the world, or perhaps a microfinance charity that has a focus on lending to particular types of people, such as female entrepreneurs. It is also worth reading a bit about the background and reputation of the charity you are thinking of getting involved with to make sure it’s the right option for you and has got a good reputation in the industry.
When it comes to donating money for microfinance projects, there are two main ways you can do this. One of the most popular ways is simply to donate money to the cause of your choice, as you would any other charity. This is then used to make small loans to the intended beneficiaries. The other way of donating is by giving money to finance specific beneficiaries – you can then choose for the charity to reallocate the money when the beneficiary repays the loan, or you can reinvest it in someone else. Most people either agree to keep reinvesting their money or simply donate it outright so that it can have the maximum benefit.
Overall, microfinance is definitely worth getting involved in as it has the potential to turn lives around – if you’re looking for a charity donation with a difference, this could be a really good option.
Guest Post on behalf of World Vision microfinance charity.