ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel

Microfinance in America

Updated on January 23, 2010

Microfinance of America... WHOA!

One of the greatest social issues of the world is that of poverty.

So, with the United States as the world's dominate nation (slowly falling), why doesn't our focus turn within?  The reason is because we are too busy spending excessively large amounts of money without simple and effective planning.  Instead, our government is using its bureaucratic methods to try and manipulate all productive actions in order to achieve political ends.

While our economy needs to be stimulated, another top priority should be eliminating the poverty rate, as with the eradication of this social issue will dawn the new middle class.  With this new class, our society will be able to deliver better education to a larger percent of our adolescent population while also allowing for more opportunities.

Be Clearer

While this may seem vague, the underlying message of this post is that through the correct variation of the microfinance method to accommodate the United States, more jobs will naturally manifest, and our economy will take a turn for the better at a faster rate.

Within America's microfinance sector, there are several problems, including the:

  • type of loans
  • amount loaned
  • rules

If the U.S. is able to change the way it approaches these three aspects of Microfinance, the nation will soon be on its way to financial recovery within the less wealthy sectors.

Type of Loans

The first aspect that must change is the type of loans that are given out to applicants.  A problem that I have witnessed developing within the American Microfinance businesses is that they are all approaching the situation as if America was Bangladesh (the country that initially started the social movement).  Obviously, as demonstrated by the recent world poverty standings with the United States at 12 and Bangladesh at 36, there is a drastic difference between the two nations.  Therefore, I ask, "Shouldn't there be a drastic difference between the way that Microfinancing companies approach businesses here as opposed to Bangladesh?"

Based upon this question, I believe that instead of giving loans out to small businesses to enhance their methods of transportation/distribution/acquirement of goods, they should immediately use the capital to pay off any debt.  As debt tends to build up much faster within the States, with the widespread use of credit cards, refinanced property and other loans, paying off debt and not having to worry about 2-3 hundred dollars worth of bills will definitely improve the social situation many are facing today as it will certainly ease the financial pressure that lendees feel everyday.

Of course, social contracts and rules would still remain in place, and security would have to tighten in order to ensure the payment of specific bills (phones, homes, cars, water, electricity, heating...), but with this change will result in the elimination of debt, and with the elimination of debt will begin the slow recovery and advancement of the poor to the middle class.

Amount Loaned

The second aspect of American Microfinance that must be changed is that amount loaned out. Whereas in India, $1 goes a long way (roughly about 46 Rupees), a dollar is only a dollar in America. (Weird right?) Therefore, because of this change, loan amounts must be drastically higher instead of the $20 loans being distributed around the globe.

While financial compensation has been made towards this aspect of American economics, loans are still to small. Currently loaning at an average of $2200, I believe that the current market should account for up to $4000 of expenses. Not just a random number, $4000 accounts for 2 years worth of meals for about 30 days (about $125/month *the average food stamp allotment is $100) along with an extra $1000 for other living expenses.

As a large amount of time will be given to each "unit" to repay the money, during the early months of the loan, the goal of lendees should be to work as hard and efficient as possible.  During this time period, advancements and expenses for individual businesses would be made, deducted from their own income, while using the loans as fall back money to pay for living expenses.  Through this method, rising entrepreneurs will feel more responsible for how they allot the money lended to them while also taking further pride in their businesses.


While one of the three aspects that I find almost acceptable, the rules dealing with American Microfinance also need to find the right balance in order to sustain order and timely repayment.  

The method currently used must first be examined.  This system allows for the:

  • development of a stronger community
  • dependence on one another to support the group
  • growing sense of responsibility to help maintain a group
  • provide valuable input/criticism on business ideas and potential improvements
What I believe is flawed within the system of rules is the method by which money is collected.  While only a minor problem, the time periods during which money is collected between members of a group is much to small.  Usually held at one week intervals, borrowers are pressed to make money fast in order to continue to receive funding.  While this method does serve a purpose to help eliminate those unable to make payments, it also eliminates a large percentage of people, who like everyone else applying for loans, want to improve their social standing.  By lengthening the time period between payment dates, every 2-2.5 weeks, this allows for larger amounts to be collected while also giving members more time to do business.

Rate, Comment, Follow!

Thanks for reading, and remember that your opinion is valued!

Write me in the comments section to let me know how I'm doing!

I Think...

    0 of 8192 characters used
    Post Comment

    No comments yet.


    This website uses cookies

    As a user in the EEA, your approval is needed on a few things. To provide a better website experience, uses cookies (and other similar technologies) and may collect, process, and share personal data. Please choose which areas of our service you consent to our doing so.

    For more information on managing or withdrawing consents and how we handle data, visit our Privacy Policy at:

    Show Details
    HubPages Device IDThis is used to identify particular browsers or devices when the access the service, and is used for security reasons.
    LoginThis is necessary to sign in to the HubPages Service.
    Google RecaptchaThis is used to prevent bots and spam. (Privacy Policy)
    AkismetThis is used to detect comment spam. (Privacy Policy)
    HubPages Google AnalyticsThis is used to provide data on traffic to our website, all personally identifyable data is anonymized. (Privacy Policy)
    HubPages Traffic PixelThis is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized.
    Amazon Web ServicesThis is a cloud services platform that we used to host our service. (Privacy Policy)
    CloudflareThis is a cloud CDN service that we use to efficiently deliver files required for our service to operate such as javascript, cascading style sheets, images, and videos. (Privacy Policy)
    Google Hosted LibrariesJavascript software libraries such as jQuery are loaded at endpoints on the or domains, for performance and efficiency reasons. (Privacy Policy)
    Google Custom SearchThis is feature allows you to search the site. (Privacy Policy)
    Google MapsSome articles have Google Maps embedded in them. (Privacy Policy)
    Google ChartsThis is used to display charts and graphs on articles and the author center. (Privacy Policy)
    Google AdSense Host APIThis service allows you to sign up for or associate a Google AdSense account with HubPages, so that you can earn money from ads on your articles. No data is shared unless you engage with this feature. (Privacy Policy)
    Google YouTubeSome articles have YouTube videos embedded in them. (Privacy Policy)
    VimeoSome articles have Vimeo videos embedded in them. (Privacy Policy)
    PaypalThis is used for a registered author who enrolls in the HubPages Earnings program and requests to be paid via PayPal. No data is shared with Paypal unless you engage with this feature. (Privacy Policy)
    Facebook LoginYou can use this to streamline signing up for, or signing in to your Hubpages account. No data is shared with Facebook unless you engage with this feature. (Privacy Policy)
    MavenThis supports the Maven widget and search functionality. (Privacy Policy)
    Google AdSenseThis is an ad network. (Privacy Policy)
    Google DoubleClickGoogle provides ad serving technology and runs an ad network. (Privacy Policy)
    Index ExchangeThis is an ad network. (Privacy Policy)
    SovrnThis is an ad network. (Privacy Policy)
    Facebook AdsThis is an ad network. (Privacy Policy)
    Amazon Unified Ad MarketplaceThis is an ad network. (Privacy Policy)
    AppNexusThis is an ad network. (Privacy Policy)
    OpenxThis is an ad network. (Privacy Policy)
    Rubicon ProjectThis is an ad network. (Privacy Policy)
    TripleLiftThis is an ad network. (Privacy Policy)
    Say MediaWe partner with Say Media to deliver ad campaigns on our sites. (Privacy Policy)
    Remarketing PixelsWe may use remarketing pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to advertise the HubPages Service to people that have visited our sites.
    Conversion Tracking PixelsWe may use conversion tracking pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to identify when an advertisement has successfully resulted in the desired action, such as signing up for the HubPages Service or publishing an article on the HubPages Service.
    Author Google AnalyticsThis is used to provide traffic data and reports to the authors of articles on the HubPages Service. (Privacy Policy)
    ComscoreComScore is a media measurement and analytics company providing marketing data and analytics to enterprises, media and advertising agencies, and publishers. Non-consent will result in ComScore only processing obfuscated personal data. (Privacy Policy)
    Amazon Tracking PixelSome articles display amazon products as part of the Amazon Affiliate program, this pixel provides traffic statistics for those products (Privacy Policy)