Changing lives for under $50
Can microlending save the world?
Lee Winters circumnavigated the globe solo on a 39-foot sailboat called Jargo, named after the horse that saved his grandparents during a flash flood. The consummate entrepreneur, his pursuits have ranged from inventions, to farming, to soy protein packing and now to real estate investment with Spanish Moss Home Buyers in Savannah, Ga. Before settling in the south, he spent a lot of time in Bozeman and Big Sky thanks to friends from the University of Washington. He savored countless hours fishing Montana’s waters and he developed such a sincere appreciation for the mountains that he even settled in the west for a few years.
During his adventure around the world, he saw raging seas that made him question his survival and true poverty that made thankful to be raised in the states. His tales made him a hit at stateside dinner parties.
In one story Winters was reading a novel at an outdoor café in Cuba “drinking that rocket fuel they call Cuban coffee.” A resident started a conversation. They sat for hours discussing the state of political affairs, government mandated jobs, the man’s personal life, his work sweeping and cleaning a bakery, his dirt floor hut, the necessity – and added expense – of purified water for his daughter. He had a business plan; a way out. He would save money and buy a pig and then another, using the sweepings from the bakery to fatten them up to sell. Eventually, he would buy a breeding pair and then he and his daughter would know a life without the strain of abject poverty.
In their discussion, Winters asked him how much money it would take to change his life. He replied that $20 would buy him a single pig, $40 would buy him the breeding pair and launch him out of poverty rapidly, since he could sell piglets.
“I’ve never seen a man jump so high in the air so quickly. It was a moment of pure joy,” Winters said of when he handed over the $40. The man immediately ran to catch the last bus to the farm and purchase the pigs. In his exhilaration, he forgot to say thank you. So, he raced back to thank Winters profusely.
“That was a good day,” Winters said with a smile.
In many ways, what he did was a direct method of microlending, except in this case it was giving.
While microlending is debated in the nonprofit world, with some people believing funds should be spent on things like infrastructure, there have been promising results.
“A microfinance program in Uzbekistan resulted in 71% of the participants reporting an increase in food intake quality. One study showed that when a microfinance program was put in place, there was an 18% decline in extreme poverty,” according to a Borgen Project blog post.
Organized somewhat like “GoFundMe” accounts, people can elect to give out loans to entrepreneurs worldwide using Kiva.org. While according to the Center for Global Development, “the person-to-person donor-toborrower connections created by Kiva are partly fictional,” the money does go to lenders who then distribute the loans to small business owners, though it may not be directly to the person pictured. Kiva uses partnerships with financial institutions where it transfers crowdfunded money. People can make loans as low as $25 and then withdraw the funds or relend when the money is repaid. Boasting a 96% repayment rate, Kiva now operates in 77 countries and has funded $1.5 billion in loans.
Other microlending organizations cited by the Borgen Project for empowering the poor include: Zidisha, the first direct person-to-person microlending organization that focuses on entrepreneurism and job creation; Building Resources Across Communities, which distributes loans to lenders using donations and other funds and also invests in water and schools, sanitation services and hygiene; Women’s Microfinance Initiative (WMI), which has loaned over $4.5 million to rural women with loans of between $100 and $250, at 10% interest. The organization claims 99% of borrowers double their income within six months of being in the program.