Microcredit

"Microcredit" is offering financial services to poor people such as saving and small loans (micor loans).

So called "micro loans" is lending out a small amout of money to poor people (especially women) in the "third wolrd countries".

An example is:
A woman somewhere in a villige in South Asia has no money and can't support herself and her children.
She takes a small micro loan from a bank and for that money she buys a cow.
With this cow she produces and sells milk. She pays of the loan and earns money.
Later she want's to expand her business and takes an other micro loan, a slightly lagrer one but still a micro loan.
This time she buys hens and agricultural region and tools.
Now she sells milk, eggs, germs and her own homemade bread.
She pays of her loan and earns even more money.

She can save her money in the bank as well. Microcredit offers saving as well - saving that is good for people with smaller amout of money.


The goal with this is to make more self employed persons in poor countries.

You might think that you can earn a lot of money on giving microcredit, but according to BBC's radio interwiev with Mohammed Yunis, the key person of the Grameen Bank it's not about raising money, byt about raising the living standards.

In the interwiev it's also mention that they have a safety of payback because people who they are working with care a lot about their reputation.

Read some interesting stories about how microcredit change peoples lifes here.