Monday, April 30, 2007

Let’s Buy a Micro Finance Institute

I’d like to get 10 people who are all interested in investing $11,000 each to buy a partial interest in a Micro Finance Institution. $100,000 to actually invest and $10,000 for administration and any operating costs. Anybody interested?

Sunday, April 15, 2007

The Operational Side of Micro Finance

I thought this was interesting. This individual helps to run a community in Uganda that engages in small manufacturing and Micro Finance. It gives a feel for what types of cultural issues must be over come to make Micro Loans work.

Interview with Grace from LiA

Tuesday, April 10, 2007

Tiny loans can make a big difference.

Here are some interesting facts and conclusions regarding Micro Finance as it operates in Bolivia.

Bolivia has a population of a little less than 9 million. In 2005 around 480,000 Bolivians received micro loans. That means that about 5% of the population is taking advantage of micro credit.

It is interesting to note that there are 25.5 million small businesses in America. That would imply that 8.5% of Americans own their own business. Given the nature of a developing economy the potential for small businesses in Bolivia would be at least 10%. Perhaps higher. That means the Bolivia has the potential to at least double its current Micro Credit focused on small business. Not to mention opportunities for mortgages etc.

Total Micro Loan values in Bolivia for 2005 were $550 million. Total estimate Gross Domestic Product was $9.9 billion. That is, Micro loans make up 5.56% of Bolivia GDP. 12.4% of the GDP is made up of investment. (Compare this to the US which is 16.6%.) Assuming that the Micro Loans constitute a form of business investment, almost half of Bolivia’s investment is made up of micro loans.

Between 2004 and 2005 the growth of Micro Finance loans in Bolivia equated to 1.7% of GDP. With an estimated growth total rate of 3.3% Micro Loans are driving half of Bolivia’s economic growth.

Additionally, this is growth that benefits the average person on the street. Unlike growth that comes from things like price increases of natural resources which typically benefit a few people in the society who control those resources.

The statistics for these notes come from the following Web Sites.