Small Business Micro Loan – Poverty Solutions at Work

A small business micro loan can begin to break the cycle of poverty in the Philippines and other poor countries around the world. The concept of micro loans is really quite simple and has proven to be very effective in lifting poor, but ambitious, families out of lives of desperation.

A Simple Micro Loan River Ferry

Microfinance, the area of business where small business micro loans are used, is just one tool that enables the poor to improve their station in life by starting or growing a small business.

Generally, a small business micro loan is granted to the working poor in developing countries which allows them to begin to earn a steady income and pull themselves out of poverty.

Many people have noted that micro loans are based on the premise of human dignity and worth. People who borrow a micro loan are hard workers who simply want to improve their families’ financial situation.



The sizes of the micro loans vary from as little as $20 to a few thousand dollars. I have seen instances where the ability to buy one small farm animal has compounded itself into enough income for an entire family.

The borrowers work very hard just for their daily survival and simply need help in establishing a sustainable solution to guide them and get them started. These people are looking for a hand up, not a hand-out.

Often, the successful repayment of one small business micro loan leads to another, slightly larger loan to help expand the business later on. In this way, a family can slowly build a business that will last and even hire others within the community who were originally in the same economic predicament.

Future Business Owners?

Some of the biggest proponents of small business micro loans argue that this type of financial backing is more successful and effective in alleviating poverty. Whereas a charitable donation can be very helpful in the short-term, teaching the poor important business skills and building up their sense of duty and self-worth often has long-term results.

It is important to remember that the causes and solutions to poverty are very complex, and that a single answer does not exist.

A small business micro loan certainly cannot solve all of the poverty problems in the Philippine or anywhere else. But micro loans have proven to be a successful answer for many.



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