Microfinance has proven itself to be a powerful pressure in village-based development over the world. It empowers villagers, particularly women, offering the leverage should have economic success among families that are desperate for the chance away from poverty.
Planet Aid supports microfinance programs in rural India, accomplished by its sister organizationHumana India. Despite new economic opportunities in the nation, poverty remains endemic, specially in rural areas. The rural poor never had usage of financial services by the formal banking sector. They have thus had to rely on loans at high interest rates from informal sources. Microfinance is a beneficial way to help and enable these individuals, especially women, who make up a vital percentage of the poor and suffer disproportionately from poverty.
Humana India began its first microfinance program in June 2007. Loans are offered to women from non-urban areas, who are often specially deprived. With these loans women have been capable of buy buffaloes, wool to make carpets and rugs, or obtain funds to open up a small shop. In 2010-2011 alone, the program provided loans totaling $5,574,260 to 8,725 women.
The project also allows set up peer groups that serve to collectively assure 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 associate of a BFG will get a loan of 10,000 rupees, with refund guaranteed through the group.
Development Aid
