Sunday, October 26, 2008

My First Foray Into Microfinance

I’ve just started reading Banker to the Poor: Micro-lending and the Battle Against World Poverty, by Muhammad Yunus, who won The Nobel Peace Prize in 2006 for his innovative economic work as the founder of The Grameen Bank.

Intrigued by the concept of microfinance, I’ve held off from actually investing because all of the opportunities that I found were overseas. (In the same way that I advocate for people to adopt domestically, I also wish that there were more of a focus on Americans working on economic and social issues here in the US.)
Annoyed by E*Trade’s surprise forty-dollar “inactivity fee” on my first (experimental) stock purchase, I was happy to see that domestic options were recently added to MicroPlace and invested one hundred dollars via ACCIÓN USA.

One of the coolest aspects of the process was that I was able to fund this investment via PayPal making the set-up infinitely easier than navigating the small print and other assorted pettiness of FEE*Trade. And given the downward spiral of the stock market itself in recent weeks, I’m totally fine with the 2% that this $100 should return over the next thirty months. I also like the fact that my hundred dollars will be doing something more than just making money for a brokerage firm between now and then.

Another amazing facet of microfinance is that women, in particular, benefit from receiving microloans. Wouldn’t it be great if this simple, yet radical, economic concept could help more mothers in this country retain custody of their own children, sparing their sons and daughters from foster care, and keeping more families together?