Microfinance Brazil - The Birthplace of a Revolutionary Concept
By Aunta Naja
Top Financial Articles Blog
Tuesday, December 1, 2009
Let's take a trip back in time, shall we? The year: 1973. The place: Brazil. It was here that Accion International distributed the first ever microloan. Microfinance in Brazil was born. It wouldn't take long for other countries to catch onto this powerful concept of providing small loans to the working poor, allowing these individuals to create their own businesses, save, and invest so they could pull themselves out of poverty.
Now, fast forward back to the present. As it stands, some $25 billion in microfinance loans is currently working to help the extremely poor create long-term financial independence in their lives. Microfinance institutions are popping up in developing countries throughout the world, and nonprofit organizations are working tirelessly to raise more funds so that extreme poverty will soon be a distant memory.
Microfinance in Brazil and elsewhere is about more than just giving out loans. It's about educating and empowering the poor, many of whom are women, to create better lives for themselves. That's why the process doesn't just involve doling out small loans, but it also includes educating the recipients of the loans on sound business principles and proven money management techniques that allow them to grow their assets. The result? Recipients of microfinance loans are able to pull themselves up out of poverty because they are armed with the knowledge and the resources needed to make a better life for themselves.
Since the birth of microfinance Brazil, the industry as a whole has given loans to over 100 million poor people throughout the world. The amazing part? Over 97% of these loans have been repaid. This is proof that microfinance is more than a hand out; it's a long-term solution that creates a sustained positive impact in the lives of those who receive these loans.
But there is still a lot of work to be done before the microfinance industry reaches its goal of eradicating extreme poverty. Estimates show that about $250 billion is needed to get these loans to all the poor people in the world who need them. Thankfully, there are several nonprofit organizations working diligently to make this dream a reality.
One such group is Lingerie Miami. This revolutionary philanthropic brand uses the powerful world of fashion to raise funds for microfinance institutions throughout the world. The first fashion show was held in February 2009, and it attracted top fashion designers and A-list celebrities (the event was hosted by Eva Longoria-Parker). Created by Renata Black, this exciting new concept is being taken to New York and other major cities throughout the world in the near future.
Proceeds raised from Lingerie Miami and future shows directly benefits microfinance Brazil and several other countries. With the help of this philanthropic brand and other similarly-minded nonprofits, the microfinance industry hopes to reach its goal of eradicating extreme poverty and world hunger and promoting gender equality throughout the world.
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