A Quote by Gayle Tzemach Lemmon
Microfinance does not require previous experience or loans to the same extent as a small-business loan, so it's easier for women to enter the micro sector.
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Microfinance is an incredibly powerful tool ... but we must move beyond micro-hopes and micro-ambitions for women.
We developed microfinance to fight loan sharks - I was telling people don't go to loan sharks - not trying to take advantage and make money for myself. I would be a junior loan shark if I did... It is not a panacea.
We developed microfinance to fight loan sharks - I was telling people don't go to loan sharks - not trying to take advantage and make money for myself. I would be a junior loan shark if I did ... It is not a panacea.
Where micro-finance focuses on small loans to individual, low-income women, think of Acumen Fund more like a venture capital fund.
In one month, the Small Business Administration does $1 billion of loans and guarantees for businesses; many of those are women-owned businesses.
Making loans and fighting poverty are normally two of the least glamorous pursuits around, but put the two together and you have an economic innovation that has become not just popular but downright chic. The innovation - microfinance - involves making small loans to poor entrepreneurs, usually in developing countries.
Because microfinance is so manageable in terms of the size of the loan, people have made it the cornerstone to lifting women out of poverty.
I founded Grameen Bank to provide loans to those considered traditionally unbankable. Grameen Bank works with the poorest and often illiterate, providing uncollateralized micro-loans for tiny business enterprises by which they can lift themselves and their families out of poverty.
Imagine you have six loans, small to huge. People want to close loans and because of that, they try to pay off the small loans, but that's not the right strategy. The right strategy, of course, is to pay the loan with the highest interest rate. People make this mistake and it costs them lots and lots of money, it's a very expensive mistake because interest rates accumulate and become very, very expensive very quickly.
The fact that you have government-guaranteed student loans has created a whole new sector in the American economy that didn't really exist before - private for-profit universities that sell junk degrees that don't help the students. They promise the students, "We'll help you get a better job. We'll arrange a loan so that you don't have to pay a penny for this education." Their pet bank gets them the government-guaranteed loan, and the student may get the junk degree, but doesn't get a job, so they don't pay the loan.
Women are allowed to enter the spaces of the senses, the space of the body, the spaces opened by sensations, all kinds of feelings, but women are not allowed to enter the spaces of reason to the same extent, that is to say the space of ideas, political ideas.
A consolidation makes sense only if you can lower your overall interest rate. Many people consolidate by taking out a home equity line loan or home equity line of credit (HELOC), refinancing a mortgage, or taking out a personal loan. They then use this cheaper debt to pay off more expensive debt, most frequently credit card loans, but also auto loans, private student loans, or other debt.
In 1989, I started the National Association of Business Women. We incorporated microfinance and different job training for women. We did a survey, with USAID, that found women lacked training, credit and information.
The invention of the micro-loan was a big surprise to me. Who would have guessed loans of less than $20 made to poor people in undeveloped countries could create thriving local economies? And, even more surprisingly, that they more reliably pay off their debts than the wealthy of the world.
A well-functioning microfinance bank can actually be a profitable business as well. So it became a perfect proof point that, through business, you can provide an experience that leads to individual self-empowerment.
The federal government requires that its loans be paid back within 10 years of graduation, and Harvard has pegged its loans to the same 10-year timetable. Yet despite Harvard's low default rate, the idea of years of loan debt is daunting for some students even before it's time to pay back.
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