Last year, I became fascinated with the Grameen Bank, an organization founded by Muhammad Yunus that provides microcredit to the poor to fund small businesses to pull their families out of poverty. Since Grameen’s inception, microloans have been provided to more than 7 million borrowers all over the world (97 percent of whom are women), all without collateral, based purely on mutual trust.

I was having a conversation about microcredit with an accountant friend a couple weeks ago and she said something about how they must have a low rate of repayment since they are giving out loans to the poor. Amazingly enough, they have a loan-repayment rate of over 95 percent (according to the Grameen web site)! The poor have a better track record of repayment than the wealthy because they have so much more to lose if they don’t repay. Of course, nothing is ever perfect, and Grameen occasionally encounters periods of repayment difficulties but continually proves to rebound from such delinquencies.

RESOURCES

Yunus’ 1997 autobiography Banker to the Poor is a great resource if you’d like to learn more about Muhammad Yunus, the Grameen Bank and microcredit. Yunus also recently wrote a new book called “Creating a World Without Poverty” which I’m looking forward to reading.

Another amazing microcredit organization is called Kiva. Kiva allows you to lend to entrepreneuers featured on the Kiva site, as little as $25 at a time. Once your Kiva loan is repaid, you can choose to withdraw your funds, or give it to a new entrepreneur.

United Colors of Benetton just launched their own microcredit organization called Africa Works. You can find a special collection of Africa Works t-shirts designed for the campaign in select Benetton stores.

- c / Colorcubic™