Microcredit

Microcredit, or small, short-term loans to the very poor, can help to bring about wholesale changes not only in personal income and the local marketplace, but also by adding meaning to life, building self-esteem and encouraging social integration. The cash advance is only the vehicle. The spiritual encouragement is the destination. A small loan to make possible the purchase of raw materials, a sewing machine, a bicycle, and a goat or to pay school fees for even one child affects the community in a myriad of other ways. The core concept of microcredit was built upon the belief that credit is a fundamental human right. The authors hope that this paper will inform, engage and help all those who are interested in learning how microcredit can provide access to hope. This paper explores the impact of world poverty on the world’s poorest of the poor and the need for microcredit; what a microcredit program is and the different models for implementing it; the impact microcredit lending is having on the world; the types of microenterprises run by borrowers and the impact they have on their earnings; guidelines for implementing a culturally sensitive microcredit program and how to measure its impact. Based upon the authors’ analysis, the paper also makes recommendations to Project Mercy, a Non Governmental Organization (NGO) working in Yetebon, Ethiopia about how microcredit can make an impact in its community and to Regis University about the need to incorporate microcredit into the Master of Nonprofit Management (MNM) curriculum.