The use of financial aid and other support to developing countries actually harm their economies, rather than strengthens them. Simply handing over money or giving away goods produced in western countries is not the answer to help poor countries develop sustainable economies for the long term and to help them get back on their feet after war or in the event of a natural disaster.

But we want to help these poor people, right? So how do we do this without giving money or supplies to them? Also, the needs of the people in these countries often vary greatly to the needs of people in western countries, so it makes solving their problems all the more complex. But who better to develop solutions than the people themselves. The people who are actually living in these situations and who experience the everyday hardships of trying to survive in a life of poverty.

In 1997, the Grameen Foundation was founded in order to address this very issue. The Foundation believes that anyone who has the desire to improve their own lives and living situation have the power to do it themselves. Even people who live in extreme poverty. All they need is access to the right tools and information. 

The overarching intention of such organisations is to drastically decrease the number of people living in poverty around the world. According to a report published in 2014 by the United Nations Development Program, 1.2 billion people, or 22% or the world’s population, live in extreme poverty on less than US$1.25 a day. When we raise the income poverty line to $2.50 a day, the global poverty rate rises to almost 50% of the world’s population with 2.7 million people living in poverty. It is extremely difficult to fathom how numbers like this are possible today, in the age of information and technology, when we are supposed to be more advanced than ever. Why are so many people still being left behind?

Any self respecting person is happy to receive help, but at the same time, they don’t want to be constantly living off handouts from others. People take pride in doing things for themselves and building a secure existence for their families. Micro-financing is not just a simple cash injection. People are provided with the money they need to realise their dreams of opening a business and becoming an entrepreneur. But this money is actually a small loan, which is to be paid back by the recipient, once they are up and running.

The idea of micro-finance is spreading as a means of aid, with more and more businesses are popping up all the time in this field. I have picked a few, who I believe, are leading this change. The videos below explain exactly how they work and where the money is going.



  • Collaborate with private sector companies, non-governmental organisations, government agencies, such as commercial banks, mobile operators, agricultural co-ops and other providers to create financial products and services for the poor and poorest people in the world
  • Financial services provided include helping the poor open and manage a savings account



The great thing about Kiva is that you can search a specific type of business or person that you would like to help. You can read about their business and what they need the money for, then make a direct loan. You can even search for people with a fashion business and find wonderful individuals trying to make a positive contribution to the industry!

The steps to Kiva:

  1. Borrower applies for a loan
  2. Loan goes through the approval process
  3. Lenders crowdfund the loan in increments of $25 or more
  4. Borrower repays the loan over time, based on their own abilities to repay
  5. Lenders use the money again to finance other loans, donate or can get their money back



  • Provide access to saving, small business loans, insurance and training
  • Form partnerships and build infrastructure to support new businesses


In each of the businesses there is a very high repayment rate of around 98%, meaning that more families and communities can be helped. The poor people who benefit from these services appreciate the help and support that is provided to them and want others in their situation to also receive the benefits.

Micro-financing empowers people, giving them real skills and confidence that they can be proud of. They create their own livelihood and learn new skills that they can continue to pass down through generations, creating real and meaningful changes in their communities. The most common reason for people wanting to take out a micro-finance loan is that mothers want to provide a better life for their children. And while they are at it, they also set a great example for their children, enabling the cycle of poverty to be broken for future generations.

Small entrepreneurs in developing countries know their land, know their culture and they know their needs. They already have the fundamental knowledge and basic ideas for their business. Micro finance companies provide the support, training and guidance that they often lack in order to get them started and help them grow on their own. It is more than just giving people money, it is about giving them an opportunity to succeed.


Mirco-finance: A sustainable & realistic solution to poverty

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