Microfinance Nonprofit Zidisha (YC W14) Scores Donations from Craig Newmark

forbes.com

12 points·jkurnia··4 comments

If people are interested in getting involved philanthropically (or otherwise!) in one of the world's largest microfinance organisations -- and supporting low-income entrepreneurs in the developing world -- please do get in contact with me on j@greenaway.me.

I'm based in London, and would love to talk with tech-literate people.

Please don't hesitate!

Is there ample evidence that microfinance works? I thought it's been fairly controversial.

It just doesn't seem like it supports long-term solutions to developing world poverty.

My hypothesis would be that microfinance just encourages subsistence farmers to keep doing subsistence farming, which is pretty inefficient.

Subsistence farmers by definition don't need loans.

So you could see in theory how it could allow them to get out of subsistence farming.

IE Buy tools they can't afford that would allow them to increase yield to pay for the loan and profit to send kids to school or something.

But the reality is microfinance has always been available, called things like loan sharks. Yet they have stayed poor.

So you need to think why this microfinance would work.

Some microfinance bring training with the loan for instance.

Lowing the interest % is the equivalent to giving them money direct, which has some evidence it works.

But I tend to agree "microfinance" itself doesn't work.

I wonder what made them decide to donate vs invest.

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