Actress and activist Natalie Portman called on an audience at Stanford University to contemplate ways of helping the world’s poor, speaking specifically about microfinancing and village banking, and her work with FINCA International – a nonprofit that equips low-income people around the world with the tools they need to succeed by providing financial services such as small loans or savings accounts, by reaching people in remote communities using technology like mobile phones and tablets, and by providing access to life-enhancing products, like solar home systems and clean cookstoves.
More than 3 billion people around the world are living on less than $2 per day. Giving small loans to help the poor start businesses helps people raise their standard of living. It also means more children can go to school and fewer are malnourished. But traditional financial markets have failed to serve these people, in part because it’s easier to make money on larger loans. Microfinance addresses this need.
Portman told the story of a woman in Uganda, one of FINCA’s clients. She had been living on less than $1 per day, raising 10 daughters. “She was begging her neighbors for their dirty laundry water so she could wash her kids’ clothes.” Portman said of the woman’s life before she started her own business. The woman then opened a roadside food stand with a loan from FINCA. By the time Portman met her 10 years later, she had expanded her business to a restaurant that employed other local people, and all of her children were in school, including one daughter attending university. “Her entire life was changed,” Portman said.
FINCA sets up “village banks” in remote areas to serve poor populations. A bank can be established with $5,000. A group of residents, usually women, sets up the bank’s governance, deciding who should receive loans and using social pressure and support to make the system work. FINCA’s clients repay their loans at a rate of 97 percent.
FINCA has impacted 75 million lives and serves 2.7 million microfinance clients in 44 countries. And the benefits that come from the loans are improved education, nutrition, medical care and shelter for the women and – most of all – their children.
Be part of the village in fighting the good find. Donate your time or resources at FINCA International.