Rising up...

This opinion piece in today's New York Times discusses a program in Brazil that gives grant money to poor people if they comply with certain rules, making sure their children attend school, for example. The program has, apparently, increased the income of its participants and has reduced the poverty rate from 22% down to 7%.

A similar program in Mexico has also successfully met its goals of increased school attendance and more visits to medical clinics. Forty countries around the world have started linking welfare money to standards of behavior.

I certainly have no problem tying standards of behavior to receiving public money, especially if the money is already on its way to a poor family. Shoot, even though I believe New York City Mayor Mike Bloomberg is the King of the Nanny State, I agreed with the rule he supported that removed soda from the list of food items that food stamps can buy. That's what happens sometimes when you use someone else's money, they get to set the rules.

I believe a better and more long term solution to poverty anywhere is the use of microloans. Microloans promote individual responsibility, and dreams for the future, better than any program that requires one to follow someone else's priorities. Kiva, only one among many organizations providing microloans around the world, makes it easy for individuals to participate in their program. 

The Blue Sweater: Bridging the Gap Between Rich and Poor in an Interconnected World offers an interesting overview of how microfinancing works as Jacqueline Novogratz makes her way from working as an international credit analyst to founding the Acumen Fund, a non-profit global venture fund.

Historically, microloans have focused primarily on Third World countries, but that is changing. Kiva, and other microloan companies like Microplace and Modestneeds, are offering the same opportunities here in the United States. To Catch a Dollar, a documentary released a year ago, shows the impact the microloans have had in the US. It focuses on Muhammad Yunas, Nobel Peace Prize winner for both pioneering the idea and proving the success of microloans in the Third World, who decided the same model could work in America. It's not available on netflix, but here's a clip





This review of the film is pretty compelling. I'll figure out some way to see it.