Thursday, July 19, 2007

A Billion Bootstraps

I recently read a book called A Billion Bootstraps, which is an excellent introduction to global poverty and how microcredit can lift people out of poverty. Although perhaps not the most inspiring or best-written book I've ever read, it's a very readable book with highly practical information, including how you can calculate the cost of helping to pull one person out of extreme poverty. The book also points the reader to many organizations who provide microloans, as well as third-party sources from which people can learn about microcredit.

One thing that's especially intriguing to me about microfinance is that loans can be recycled many times. For example, say you loan $200, or rather that you donate $200 that is loaned out to an individual. The loan might be paid off in six months, then the money is loaned to someone else. Over a 10 year period, the loan might be given to 20 different people. Assuming each person has a family of five, you could be helping 100 people. It's almost like the power of compounding interest. It's an intriguing investment opportunity.

Boulder, Colorado (10 minutes from where I work) apparently is one of the two best places in the US to learn about microcredit. I'll have to do more research.

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