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Microfinance

Microfinance is essentially providing financial services to low income people. Muhammad Yunus pioneered this idea of giving small loans to entrepreneurs who live in poverty and have no access to capital. Microfinance, however, is different than traditional philanthropic charity. By offering these loans, entrepreneurs are able to start businesses or expand the business that they already have. This helps the local economies, can change or even save lives, and on top of it all can be a great investment. Repayment rates globally average at around an astonishing 97%, and interest rates can be surprisingly high. Microfinance can be an excellent Million Dollar Choice and a great middle grounds between simply donating money to some organization and traditional investing. After all, if you are going to invest anyways why not help end poverty and change somebody's life while doing it?

Jessica Jackley: Poverty, Money -- and Love

In her presentation Jessica tells her story, explains what microfinance is, and talks about the amazing impact that it can have. After hearing a speech given by Muhammad Yunus which really touched her, she quit her job to go and volunteer in Africa. When Jessica returned home, she and one of her friends started a website called Kiva. Kiva allows investors that want to make a difference the opportunity to give small loans to entrepreneurs that need capital to start or grow their business. Jessica believes that when people have the choice between making money on their investments and making money while making a difference in the world they will choose the latter. She identifies herself as an optimist, and believes that people do want to make a difference, many just don't how to go about doing it yet.

Sangu Delle: In Praise of Macro -- Yes, Macro -- Finance in Africa

Sangu takes a new perspective to ending poverty and microfinance in his presentation. He argues that the current microfinance model assumes that everybody in Africa is an entrepreneur when in reality what the people really need is a good, stable job. Rather than giving small loans to lots of small individual business owners Sangu believes that our investment would go much further if we were to invest a lot of money in one business. This would create larger businesses which are able to drive down costs causing prices to drop for everyone, creating many jobs, and in the end meaning more money for everybody. Sangu has seen this approach in action. He helped in the creation of Stawi, a banana growing company that was started with a $100K loan. Stawi produces banana based flour and baby food, and has been a great success in the African economy.

Jacqueline Novogratz: Patient Capitalism

In this presentation Jacqueline explains how we can see a greater impact by investing in loans for the poor. Through her own experience as an investor and small business owner in Africa she has learned the importance of listening to the people. The mindset in Africa is much different than the American mindset. We often come in trying to fix everything with our fix-all solutions thinking that we know what is best for everyone, but in reality, the poor know what they really need. Jacqueline tells the story of a bakery that she opened along with 20 African women. These women were hesitant to give their input; however, when she eventually got them to start contributing the busy really took off. Microfinance is all about allowing these poor entrepreneurs the choice of how they are going to use the loan money since they know what will benefit them and their business the most.

Gayle Tzemach Lemmon: Women Entrepreneurs, Example Not Exception

Gayle started as a news reporter, then she found the story that she was born to write. She believes that women entrepreneurs are often overlooked and underappreciated. It is her mission to bring the success of women entrepreneurs to light, particularly those women in poverty stricken parts of the world that have truly been able to make a difference in their communities. She tells the story of an Afghan woman who is currently starting her third company. When she created her first company it was a huge success. She was able to employ many of the women in her neighborhood during a very dangerous time when they could have been killed for getting caught in public. Gayle encourages the audience to invest in microfinance to help fund women entrepreneurs and fight global poverty.

Jacqueline Novogratz: Invest in Africa's Own Solutions

Jacqueline is a social entrepreneur that has done a lot of work to help to help the poor in Africa. She founded a company called Acumen that focuses on helping the poor to live better lives. She mainly focused on one of their current projects, helping to provide bed nets to protect African people from malaria and disease ridden mosquitoes. She got this started by providing a loan to a production company to make these nets. The factory employed many local African women. The next struggle that Jacqueline encountered was distributing the nets. She decided to implement a Tupperware style sales strategy where local women would sell the nets to their friends. Several times throughout the presentation Jacqueline argues that creating good business models and learning from the ideas of the locals are the best ways to fight poverty.

Rose Goslinga: Crop Insurance, An Idea Worth Seeding

Rose pioneered the idea of micro-insurance. Basically micro-insurance insures farmers in Africa against droughts. These livelihood of these farm families is dependent on the harvest that they get each year. As you can imagine, the damage caused by a drought that strikes and kills their crops can be devastating. Through Rose's insurance company these farmers are able to replant their crop in the very same year and still receive a substantial harvest. This company began by selling insurance directly to farmers but soon found out that there was a better way. They began to sell the insurance policies to the micro creditors that were financing the farmers. This not only insured the investment of the creditors, but also enabled a lot more farmers to receive the benefit of insurance.

Jacqueline Novogratz: A Third Way to Think About Aid

In this presentation, Jacqueline argues that we need to start thinking on a global level. We must not only think of aid on a local level, but we must see ourselves as citizens of the world and search for ways to help those in poverty in other countries as well. She showed a lot of examples of entrepreneurs and what they are doing to make the world a better place. Many of these entrepreneurs would never have been able to do what they are now doing without the capital they were able to obtain through microfinance. She talked about one man who was a rural Pakistani farmer, who through drip lines that were made available to him, was able to salvage his crop during a drought. By being able to finally provide for himself he was able to send all of his children to school for their first time. Jacqueline said that we can get involved by measuring not only return on our investments, but also by measuring the social impact that our investments create.

Alberto Cairo: There Are No Scraps of Men

Alberto is a man who works for the Red Cross in Afghanistan. In his presentation he tells the story of a man who is missing both of his legs and one arm. Alberto helps him to get prosthetics so that he can walk again. He also talks about the attitude and motivation that this particular patient as well as other patients demonstrated. This presentation didn't relate directly to microfinance; however, it did show the need for microfinance. Many of these handicapped people want to work and accomplish things with their lives, they just don't always have the opportunity.

Shaffi Mather: A New Way to Fight Corruption

Shaffi shares what he is doing to help fight poverty and corruption in this presentation. He tells us about an ambulance service that he started with a few friends in India that has been very successful and saved many lives. He is also working to start an organization that will fight corruption in India. In particular he wants to put an end to bribes imposed on citizens that total up to as much as India's total GDP each year. While the stuff that he is doing is great I don't feel that it is very applicable to microfinance and Million Dollar Choices.

Iqbal Quadir: How Mobile Phones Can Fight Poverty

Iqbal is a man who was born and raised in Bangladesh, went on to become an investment banker, and eventually went back to Bangladesh on a mission to make a difference in the lives of the poor. From his own personal experiences and after doing some research he realized that connectivity is productivity and decided that he wanted to help connect the poor so that they could be more productive and get out of poverty themselves. He started a company that helped poor locals take out financing to purchase a cell phone. Those who bought phones were able to let other locals use their phone for a fee and start small businesses themselves. Being able to make phone calls has helped the people in Bangladesh by saving them a lot of time which adds up to mean more productivity, less poverty, and a better quality of living.