Many people in developing communities, particularly in rural areas, do not have access to standard banking services. This obstacle can prevent hardworking individuals from protecting savings or to get loans to help them survive during lean times or start or grow their business.
Microfinance has proven itself to be a powerful force in village-based development around the world. It empowers villagers, especially women, providing the leverage needed to obtain economic success among families who are struggling to find a way out of poverty.
Humana India began its first microfinance project in June 2007, and Planet Aid helped fund the project from 2011 through 2014. Loans have been provided to women from rural areas, who are often particularly disadvantaged. With such loans women have been able to purchase buffaloes, wool to make carpets, or obtain capital to open a small shop. In 2010-2011 alone, the project provided loans totaling $5,574,260 to 8,725 women. The project also helped organize peer groups that serve to collectively guarantee the loans.
Recipients of loans are organized into peer groups of five (called “better future groups” or BFGs) and large groups of thirty women each are called sahelis. Each member of a BFG can receive a loan of 10,000 rupees, with repayment guaranteed by the group.
Microfinance In Action:
Click on the case study below Educating Women Through Self Help Groups: A Case Study of Humana People to People India, Alwar, Rajasthan to read more about the success of this program.