Microfinance: What's the Deal? January 18 2012
As Perry and I get ready to embark on our adventure to Uganda for the Women's Microfinance Initiative graduation ceremony, you might be wondering what's up with microfinance and why is Greenlight Apparel supporting it?
Both good questions.
The deal behind microfinance if you're not already familiar with it (or even if you are) is that it provides micro loans to those individuals who otherwise wouldn't be eligible for credit. When you think about the times in your life that you've had to rely on credit (whether it's through a family member, friend, or professional banking institution), it becomes pretty obvious that most of us need some assistance from time to time. Essentially proving the old adage true that it takes money to make money.
I for one would not have been able to get where I am without the assistance of loans and the fact that I am eligible for a loan already puts me ahead of millions of poverty-stricken people around the world.
I don’t like describing anyone as poor. That’s not an adjective that should define anyone. Poverty is a circumstance, not an identity. It can happen to anyone, anywhere, at any time. The cycle of poverty is cancerous in nature, spreading quickly and becoming more and more difficult to tackle the longer it's left untreated. Tackling poverty requires a various set of tools, some more effective than others. Microfinance is one such tool that, when done correctly, we believe to be exceptionally effective at curbing the cyclical nature of poverty by giving people practical tools and training they can utilize to create sustainable businesses.
It's not that we don't believe in charity or in giving to those in need. It's just that we don't see it as an effective tool to ending global poverty, and ultimately that's our goal. It's also the goal of the Women's Microfinance Initiative, a DC-based organization that works primarily with women in Uganda and Kenya. There are numerous microfinance organizations out there and a lot of good ones doing some amazing work. So, why did we decide to partner with WMI?
WMI targets women in rural areas who struggle with barriers to credit that those living in more urban areas don't always face. Individuals who have a difficult time getting to urban areas to access financial services are more likely to succumb to credit abuse. We also like that they target women, who have been shown to take loans more responsibly than their male counterparts and who are more likely to use the money they make to support their families and their communities, creating jobs and sending their children to school. WMI provides the training necessary to help women manage their businesses and to ensure that those women successfully pay back their loans. They have 100% payback rate and women who graduate from WMI's loan program are able to then move toward independent banking.
We tackled the apparel industry because we believe that we can do it better. We believe that you shouldn't have to decide between good athletic apparel and supporting a company that offers something good from start to finish. We believe in more than just the end result and we feel strongly that WMI has a similar philosophy. They're concerned about more than just the end result of whether or not someone pays back their loan. They invest in the training and support of women who have all of the talent, ingenuity, and drive to make their ideas work, but need a little access to capital and a little bit of training.
That's something that we feel is sustainable, practical, and addresses the long-term needs of these communities. We're incredibly excited about teaming up with WMI and Perry and I are beside ourselves at the opportunity to head to Uganda in order to get to know these women better and celebrate their incredible accomplishments! We leave Sunday and we'll be blogging about it while there so definitely stay tuned for more.