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Unitus Microcredit Loans

Lessons, impressions, and thoughts that I have about the powerful poverty-fighting tool of Microcredit and how Unitus is accelerating the growth of Microfinance around the globe.

Sunday, September 04, 2005

Economic Self-Reliance

I am on the board of the Center for Economic Self-Reliance at the Marriott School of Management at Brigham Young University. One of the things that the center has been working on is how do you define Economic Self-Reliance. The center is defining self-reliance as:

Sufficient Resource Generation (Surplus)
+ Provident Living
= Economic Self-Reliance

These definitions work for both those in the developing world as well as the developed world.

Sufficient Resource Generation means the ability to generate enough income to take care of you and your family's needs.

Provident Living means that you don't spend more than you make. It means reducing your risks so you and your family are not exposed. It means being prepared for disasters and rainy days.

Non-profit organizations focus on different types of interventions to assist those who are seeking to become economically self-reliant.

Microcredit works hard on creating sufficient resource generating ability by allowing those who don't have access to capital that resource so they can increase their income generation. Other things could include getting more education so you can increase your earning power, excelling at work so you get promoted or earn more money, or successfully starting a new business.

Provident living includes things like growing a garden, bottling food, having sufficient insurance, staying out of debt, having sufficent savings, having food storage, living a healthy life style, etc.

There are disruptor events such as Hurricane Katrina or a drought or an epidemic or even a personal health crisis that interrupt people's ability to generate income. Many non-profit organizations focus on relieving the suffering from these disruptor events. These NGOs perform a critical service in helping masses get back to a place where many of them can begin to take care of themselves once the crisis has passed and they have been assisted in getting back on their feet. Many of those suffering from Hurricane Katrina, given the opportunity, and with the proper outside assistance, will be able to, at some time, begin to sustain themselves and their family and begin to rebuild again.

Organizations such as Unitus, Accion, Finca, and Grameen work on those who are trapped in a situation, where they are denied, for some reason, the opportunity to be self-sufficient. They have the desire and the will, but because of lack of access to capital, they are unable to generate enough income in the economy that they live in to properly support themselves and their family. This is a more long-term approach, not necessarily focused on a current disaster or crisis. The hope and belief is, that if more people can move away from the poverty line, that when a disruptor event happens, that they will be prepared enough to survive the event and not find themselves unable to rebound.


At 9:10 PM, Anonymous Anonymous said...

What other types of companies out there are interested, involved or affected by economic self-reliance?


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