Microcredit - A major example

Financial support in the set up of a water pump factory is a hopeful example that causes a great impact in the developing countries.
In water shortage zones (in poor countries, unfortunately, this has been a growing problem) water pumps gain an important role allowing the exploitation of subterranean water. New designs and concepts make possible the construction of some devices that can be named as appropriated technology, since they bring together some characteristics that make them applicable in countries with few resources. They are mechanisms of high durability, easy use, and have low production and maintenance costs and are easy to reproduce. So, people can make the pumps themselves, creating a positive impact in the local economy.
With a low loan, a craftsman can set up a little manufacture (possibly employing other people) where he will produce and repair the water pumps which will be used by the surrounding population, assuring his own income source and thus improving the daily life of the communities as well.

Microcredit - A real solution

The microcredit can be seen as a true example in which the poverty fight ideals can, in practice, be applicable overcoming the old utopias that by economic, technical or political reasons cannot emerge although they are full of good will. .

Here, the microcredit should be faced as low capital loans to low income people in order to eradicate poverty. The users don’t have access to the traditional bank loans due to the scarce guarantees shown. This way, it’s impossible to start a family business making daily survival a hard job. So, the microcredit appears as a hopeful alternative to these families.

The amount of money involved is low ( in developing countries it usually don’t pass the 220 dollars) and the rates of interest still high when compared with the conventional bank rates but are an alternative to the money lenders (people that lend money with 120% to 300% of rate of interest)
The microcredit rates also support a pack of services included in a microcredit context as technical advertisement (since the main goal is the small businesses), sanitary and nutritional education, basic skills training and also promote an integration in a beneficiary group that help each other improving the chances of success.



We must note that most of the microfinance programs in the developing countries point directly to women, because they are the majority of the under poverty line population and get socially excluded. Although, they show great capacities and the necessary will to manage and expand a business.
Having a stable income source makes possible to pay the loans (the repayment rate is between 95% and 98%) to improve the family lifestyle and also creates conditions that allow children to attend school. These small loans work like a stone in the lake causing a positive impact in the people surrounding the beneficiaries. Small amounts of money produce bigger capitals which make even possible to contract employees helping other families.

The institutions that provide these services work totally or almost in a self-sustainable way because the return loans are reinvested in other loans and services, although sometimes other help is needed like the one provided by organizations, governs and philanthropists.


To guarantee the future of the services, it is considered that poverty, especially in small communities, it is predictable. Sop, it is possible to calculate the associated risk in each business dependent on the kind of activity created, owner’s experience, age, gender, lifestyle etc. This way not only the repayment rates get more secure but also the users trust do.

As we can see, the microfinance’s centers are actual development associations giving back hope and creating valuable opportunities.


For further information please visit:
Grameen Foundation
MicroFinance
Grameen Foundation(Real Example)

EXEMPLE OF ONE BUSHPROOF'S APLICATION

BUSHPROOF

Bushproof is a social privet company registered in Madagascar and in the United Kingdom, founded in 2004 by Adriaan Mol and Eric Fewste, both with working experience in non Parliamentary organisations (ONG), with humanitarian goals and simultaneously with the finality of gathering financial and social profits of their efforts and investments. Their main activities are:
- Low cost perforation and well construction;
- Fabrication of water bombs and water treatment technologies that are able to be utilized on the spot
- Consultation in the water and sanitation sector

Bushproof produced and promoted innovative and effective products characterizes by their low cost, great efficiency, simple use and maintenance, materials of easy access leading to a greater reach by the populations, and by a measurable impact on health and well being as well as a reduction on poverty.. These products are bio-sand and pottery filters, Canzee bombs, SODIS bags, methods of well perforation and micro-solar applications.
In 2005 the company received a Development Marketplace Award from a global contest it entered with the innovation that involved the use of a low cost technique of launching water jets to the construction of holes of little depth equipped with Canzee bombs, so that the production costs would enable the local availability of those bombs.
In 2006 Bushproof used that prize to build 150 wells in Madagascar collaborating with the local ONGs.
The company is already gaining the reconnection of great financers but it still has to give more attention to the production, marketing and negotiation to convince that their products represent an efficient and low cost answer.

COMBAT DIARRHOEA

Diarrhoea is a major cause of death in Thailand. About 3 million people die per year, including 1,9million children.
To combat this problem a simple and inexpensive treatment was developed that helps the hydration of the victims. To do this simply dissolve a large pinch of salt and a fistful of sugar in a jug of clean water.
This medicine was the first put to the test during a cholera outbreak among refugees on India's border with Bangladesh in 1971, and has saved the lives of more than 40 million children.
Although simple, this medicine isn’t used by all of the children who need it: there are no health conditions, parents don’t learn to do it at home because sachets of the powdered mix require packaging, storage and distribution. The treatment doesn’t reduce initially a child’s stool output, leading some parents to conclude that it doesn't work, and give up. In developed countries diarrhoea is not a “disease” because it doesn’t kill, it’s just “uncomfortable”.
Despite being the cause of death of about 1 / 3 of children, the government doesn’t support the distribution of its drug, due to other diseases such as tuberculosis and malaria diseases that are more advertised, attracting more interest and money.


According to Wandee Varavithya a doctor who has treated diarrhoeal diseases for nearly 40 years in Thailand:
"This problem isn't getting the attention it deserves".

SAND FILTERS

According to the proposed subject, we are pretending to develop a prototype of one of these filters in a way that can be used in underdeveloped countries.
This filter will be built using low cost materials and high accessibility with the purpose that anyone on these countries can have one.
The purpose of this sand filters is to avoid the dissemination of illnesses by the pathogenic agents existent in water. The filter will be capable of remove the bacterial agents and solid particles in suspension. About heavy metals there is no way to remove these materials because the necessary instruments are very expensive and not very accessible.
We hope this filter will be capable of reduce the mortality rate associated to the dissemination of illness by bacterial agents. However, and because of pollution, there is no way to stop the spreading of these diseases because of the existence of heavy metals and other substances in water. Even with all this adverse conditions we hope we can make a good job in order to help poorest populations.

MICROCREDIT

The use of microcredit system in developing countries is a very good way of fighting against poverty. Though they are insufficient, the increasing number of microcredit institutions acting among the vulnerable population helped to prevent thousands of people of becoming poor. This economic system is based on low cost loans associated with technical support on job creation and business maintenance, and on sanitary and nutritional education.
The loan return is substantially high and women have become the focus of many microcredit institutions and agencies worldwide.