We believe that one of the best ways to lift Africa from the clutches of poverty is through microfinance initiatives .  These initiatives provide microloans to budding entrepreneurs in the community.  By enabling local businesses to grow and flourish in their communities, they will provide both employment and hope to a new generation of business owners who can continue the cycle and breed prosperity.

What is Microfinance?

“Microfinance is the supply of loans, savings, and other basic financial services to the poor.” (http://cgap.org)

As these financial services usually involve small amounts of money – small loans, small savings, etc. – the term “microfinance” helps to differentiate these services from those which formal banks provide. Why are they small? Someone who doesn’t have a lot of money isn’t likely to want or be able to take out a $50,000 loan, or be able to open a savings account with an opening balance of $1,000. It’s easy to imagine poor people don’t need financial services, but when you think about it they are using these services already, although they might look a little different.

We believe that one of the best ways to lift Africa from the clutches of poverty is through microfinance initiatives .  These initiatives provide microloans to budding entrepreneurs in the community.  By enabling local businesses to grow and flourish in their communities, they will provide both employment and hope to a new generation of business owners who can continue the cycle and breed prosperity.

“Poor people save all the time, although mostly in informal ways. They invest in assets such as gold, jewelry, domestic animals, building materials, and things that can be easily exchanged for cash. They may set aside corn from their harvest to sell at a later date. They bury cash in the garden or stash it under the mattress. They participate in informal savings groups where everyone contributes a small amount of cash each day, week, or month, and is successively awarded the pot on a rotating basis. Some of these groups allow members to borrow from the pot as well. The poor also give their money to neighbors to hold or pay local cash collectors to keep it safe.

“However widely used, informal savings mechanisms have serious limitations. It is not possible, for example, to cut a leg off a goat when the family suddenly needs a small amount of cash. In-kind savings are subject to fluctuations in commodity prices, destruction by insects, fire, thieves, or illness (in the case of livestock). Informal rotating savings groups tend to be small and rotate limited amounts of money. Moreover, these groups often require rigid amounts of money at set intervals and do not react to changes in their members’ ability to save. Perhaps most importantly, the poor are more likely to lose their money through fraud or mismanagement in informal savings arrangements than are depositors in formal financial institutions.” (http://cgap.org)

“The poor rarely access services through the formal financial sector. They address their need for financial services through a variety of financial relationships, mostly informal.” (http://cgap.org)

How KIVA Works

The Safari Partners is pleased to support micro-finance in Africa through a partnership with www.kiva.org. KIVA is giving away a $25 credit to new microlenders. Click here to recieve a $25 credit to get you started.
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