BANGS Shoes have an amazing partnership with Kiva, one of the most effective mircofinance institutions in the world.
What is this microfinance thing anyway?
It’s simple. You loan dollars to an entrepreneur somewhere on the globe. It becomes a loan. Your loan helps finance a business. A step is taken to end poverty. Lives begin to change. Your loan is paid back. You reinvest the loan dollars to another business in the world. Rinse, repeat. Well it’s a little more complicated than that, but you get the idea – your dollar can go a long way.
It is difficult for poor people to gain access to formal financial services such as loans, savings and other basic financial services. The idea is this – through these small loans, individuals who are low-income have an opportunity to lift themselves out of poverty through access to financial services.
How rad is that?
Impoverished people are the most vulnerable population throughout the globe. They are at higher risk for poor nutrition, marginal living conditions, little or no access to adequate healthcare and services, contraction of diseases, and mortality and morbidity. Good news, it’s been proven microfinance helps! Studies have shown that this financial design helps the very poor to meet basic needs and helps minimize risk factors. When low-income households have access to better monetary stability, it provides them with the means to cope with sudden risks with more agility.
So yeah, microfinance works. By no stretch of the imagination is it a cure all or Band-Aid approach to helping fight the battle of poverty, it’s just a very cool and effective tool. Through appropriate methods and partnerships, microfinance can be very beneficial to those in need.
Really the simplest way for me to think about what this small loan model is – that it aims to alleviate poverty globally by connecting those with means to those without any, doing so in a way that is sustainable and replicated over and over.
Therefore the more times the Kiva/BANGS Shoes microfinance model is recycled, the more people benefit!