As small business owners in the Philippines, these women often do not qualify for traditional loans and other commercial banking services. They look to nonprofit financial institutions like Negros Women for Tomorrow Foundation (NWTF) for financial services that are specifically designed to help them build their businesses.
This week The Pollination Project honors people around the world who are helping their communities address some of their most basic needs. From a women-run business in Nigeria, to school gardens in Tanzania and Uganda, and a creative rebuilding effort in Gaza, Palestine, these grantees are showing us how small local initiatives really do make a difference.
Microfinance is a psychological enigma. It is not in anyone's economic best interest to lend money to strangers without getting anything in return. Without interest or guarantee, what is the motivation to take on such financial risk? It seems more akin to charity than to banking. Is it? The fact is that we don't know the neuropsychological underpinnings of such selfless lending.
Decades ago, private capital flowing into developing countries was a small fraction of aid dollars. Since then, that private capital investment has grown roughly 100-fold and the ratio of aid to investment has flipped. Today, every $1 in aid to developing nations is dwarfed by nearly $7 in private investment.