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Kids Do Good With Microfinance
Posted on January 17, 2012 by Paul Murdock

If you want to empower your child to feel like their money can make a real difference in the world, microfinance is the way to go.


What is microfinance and why is it important? Banks don’t lend money to people without collateral. Over 1.2 billion people around the world live on less than a dollar a day — so they don’t have any collateral. Microfinance brings credit, savings and other financial services to the poor through loans and grants from non-profits, government programs and non-traditional lending institutions.


The concept of microfinance is not new. The idea has been discussed since the 19th century, but didn’t really take hold until the end of World War II with the advent of the Marshall Plan. Its major impact on the third world, however, can be traced to the 1970s in Bangladesh, shortly after the country won its independence from Pakistan, creating one of the most population dense, poorest nations in the world.


My father is a minister and my mother is a nurse who went on mission trips to the Phillipines and Africa with Heifer Project, so I was introduced to the power of small gifts in the third world at a young age. Before you sit your kids down for the two-hour slide shows I had to endure, start simply by explaining what microfinance is and how they can get involved.


I recently worked with a number of high school students from Bangladesh and Pakistan who, after returning from a year in American high schools, were eager to put their newfound appreciation of community service into action. For many of my students, microfinance was the best way to serve their communities. They set up programs to help flood victims rebuild in Bangladesh. Other programs helped farmers to buy carts to sell their crops at market and buy dairy cows for widows in remote villages in Pakistan.


One of the coolest things about these programs is that among the donors are classmates from their American high schools. Lifelong friendships were made during the exchange year and those friends wanted to help. Plus their Facebook friends wanted to help too, and then they spread the word among their Facebook friends. Social networking has created a tremendous opportunity to reach a large number of contacts. And video sharing on YouTube, Google+ and Facebook allow supporters to see how their donations help families and communities.


Many organizations, such as Banking With The Poor and The Indian School of Microfinance for Women, have videos on their websites showing the real impact of donations. This is a great way to show kids how your money can make a big difference in peoples’ lives. Plus, the best way to reach your kids is to use their language, and that often means using technology to make your point.


Tailor your discussion and action to your kid. If you’ve raised an animal lover, Heifer Project is a good place to start. Consider giving your child the gift of a donation for their birthday: $20 buys a flock of chicks. (From personal experience, I would recommend also giving them a tangible gift that they want so they don’t resent the charitable gift.) When you give the donation, visit the website with them so they can see where the gift is going and how it will be used.


It’s easy to get your kids involved in microfinance. All you have to do is explain it to them, encourage them to get involved, and share the responsibility by volunteering your time and donating money. Then show your kids how meaningful the donation can be. If possible, track the progress of the program that your kids sponsored. Before long, your acts of selflessness will become part of your children’s life, just like it has for me.