Microfinance helps create jobs in your community. How does it do it? By giving people in the community access to the funds they need to start or grow their small businesses. These funds are provided by investors who have a vested interest in helping their communities prosper by giving loans to business-minded individuals with a dream to operate a successful small business in their community. For people who don’t have access to loans provided by larger institutions, microloans may be the only opportunity they have to get the money they need to follow their dreams.
Here’s an example of how a microloan can help develop new jobs in your community. Maria recently moved to Florida and her family works hard to sustain their day-to-day life. She finds that she has a passion and a skill for food and decides that she would like to open up a catering business someday. Unfortunately, Maria’s family does not have the funds to lend her in order for her to get the supplies she needs to get started. Maria already has some interested clients, but she is at a standstill. Banks will not give her loans because she doesn’t have substantial credit and Maria doesn’t have enough in life savings or assets to cover the small amount she needs to purchase a van, some catering supplies, and hire a helper or two. It would seem as if Maria’s dream is impossible to fulfill.
Maria decides to contact a microlender and apply for a microloan, in the amount of $6,000. This is enough to get her started, and she is able to cater several small events. Using the money that she has earned, she is able to slowly grow her catering business, and hires more people to work for her. Because Maria sought out microfinance, she was able to start her business and create jobs in her community. At the same time, she is able to provide more for her family, helping improve their economic situation all around.
By granting opportunities to individuals who have a plan to transform their economic situations, microlenders help create and develop new jobs. While large credit institutions and banks may turn applicants away for several reasons, microfinance companies are willing to work with members in their respective communities, so that everyone wins.