Loans to the Poor

Microfinancing used to mean small loans to poor people in developing countries. Generally, NGOs and banks would help entrepreneurs – often women – get individual businesses off the ground, offering people at the lowest income levels the opportunity to lift themselves up.

But microfinancing has changed a lot in the last few years. There are more services – like green microfinance, and microinsurance – and the markets have broadened and expanded. Microfinance is now worth an astounding $6.5 billion. Cell phones and wireless Internet are changing how the poor use banks.

For an overview of how microfinancing has evolved, we’re turning to Michael Swack, professor of economics and management at the Whittemore School of Business and Economics at the University of New Hampshire.

We’re also joined by Jessica Jackley-Flannery, co-founder of Kiva, the world's first peer-to-peer online micro-lending organization.

(Photo by Eric Brandt via Flickr/Creative Commons)