We all want to make a difference. We all want help those less fortunate than us. And we all know that we can help. However, most of us are doing it the wrong way. In today’s interconnected world, the times have changed drastically in terms of how we should go about giving humanitarian aid. The way we are told to give aid is more often than not a thing of the past, and regarded by many at the the forefront of disaster mitigation and poverty alleviation, as irrelevant. We are told to give big boxes of clothes, blankets, perhaps even food or water to those in need. However, this doesn’t help people rise out of poverty, or give them access to an education. Money is another option. We can give money to NGOs that supposedly “transfer” that money to the front lines of their issue; however, what if I told you that, on average, only 30-50% of your money reaches those in need. Would you still want to give your money? Probably not.

Here is what you should be doing: micro-financing. Let me tell you why.

Micro-financing is a quite simple and intuitive concept. It was pioneered back in the 1980s by Nobel Prize winner Muhammad Yunus, and has since taken the humanitarian aid world by storm. Micro-financing, at its fundamental level, is nothing more than monetary loans given by lenders (you) to individuals who are too poor to qualify for loans from regular banks. In short, it is a method of donating directly to those in need, and, getting your money back at the same time.

Why do we need to get our money back, they are poor enough already?

Well, it is generally accepted that the necessity to repay the donated funds spurs on development, and ensures that the donations are used for the intended purpose. Another plus side is that it puts you, the donator, in the position of an investor. Say for example, you donate 100 USD to a weaver in Uganda to buy another loom in order to expand her business, within a year, you will have the money back and have the choice to invest it somewhere else and change another life. This is sustainable funding. Simply donating 100 USD to that weaver does not promote development, for there is no incentive to do anything useful with it. It is also sustainable from the lender’s perspective, for you can perpetually invest in other people with that same 100 USD.

Micro-financing, unlike most other forms of donating, is uniquely engaging. Instead of sending off your money or supplies and having no idea what will be done with it, you can choose who to invest in. Passionate about women entrepreneurs, potato farming, road building, well drilling, or even basket weaving? On websites like kiva.org (which I highly recommend due to their reliability and diversity) you can invest in people across nearly all professions, and in nearly every country, all without costing you a cent.

The process of micro-financing may seem daunting, and quite confusing. However, in today’s internet age it it literally as easy as clicking a button. Micro-financing websites like kiva.org are the front runners in this industry, and are most trusted by their users. They also guarantee that 100% of your donation will reach the borrower, and will send you periodic updates from the borrower themselves, telling you about what good your money has brought them.

If you have a spare 25 dollars sitting around, or are wondering what to spend your money on, consider the possibility of changing somebody’s life through a micro finance loan. Find somebody that you identify with, and make a big change in there lives, perhaps even raise then out of poverty. That is the power of micro financing. It is easy, fun, and the most effective way to help those in need. Spread the word. With this technology, we have the ability to alleviate poverty like never before.

(Photo credit – http://www.businessnewsdaily.com/)

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