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STUDENT NHD MEMOS

Essential Question: How do we minimize poverty? Microlending can reduce poverty more efficiently than aiding.

Date:April 5, 2012 To: Mrs. Sidor From: Elena Medich Subject: MEMO 1: Aiding people in Africa

**Research question:** How do we minimize poverty?

**Thesis statement**: Microlending can reduce poverty more efficiently than aiding.

The Rwanda Genocide is one of the many past issues that has inspired the revolution of aiding people in Africa. Aiding in Africa has been common especially in the 21st century after people around the world have realized how many people are living in poverty there. Whether it is traveling to different countries in Africa or fundraising to send money to Africa, there are always organizations like Save the Children or Red Cross or Water Aid America that are determined to end hunger and poverty there. According to CARE.org "...more than 13 million people are struggling to survive [in Africa]" (CARE 1). However, "Donors...have continued to pursue the aid-based model even when it has become apparent that aid,... is not working" (Moyo 1). "Even when aid has not been stolen, it had been unproductive"(Moyo 1), so how effective is this aiding that we're doing today? If we loose money, getting the money to our destination, then the United States should think of a better way to help those in Africa.

Date:April 9, 2012 To: Mrs. Sidor From: Elena Medich Subject: MEMO 2: Aiding people in Africa

Past experiences has helped develop aiding in Africa. Today, countries around the world aid those in Africa, who are starving and in need. People send food, clothing, money, equipment, etc. Fundraisers and organizations advertise the issues in Africa daily, trying to influence society and get people to volunteer. There are thousands of organizations in America, whether it's the Red Cross, or small organizations in a school or church. Everyone who sends money or tries to help people in Africa, do so because Africa is a continent in poverty. The problem is, people don't believe that aiding in Africa is effective, including economist, Dambisa Moyo. They don't believe that all of the money sent is getting to their intended destinations, or aiding is the best way to help those in Africa. They believe that there is a better alternative to help people in Africa besides aiding and so this should concern to those sending their money or bought items.

<span style="background-color: #ffffff; color: #000000; font-family: Georgia,serif; font-size: 120%;"> "People have many reasons for doing volunteer work [for] Africa. Many want to help others and some are looking for ways to make the world a better place." (Volunteer in Africa). Some are careful to only send their money to non-profit organizations so they believe all of their money is getting sent to those in need. Aiding people in Africa has become a national revolution, especially throughout the last decade. Some organizations vow to help the entire lives of those in Africa, by "[creating] direct programs including health, nutrition, education HIV/ AIDS, and more" (Save the Children). Other organizations solely focus of one issue, such as the lack of clean water. WaterAid America's purpose is to collect money "so that they can enjoy access to clean, safe drinking water for long into the future" (WaterAid America). Those who are in favor of sending or raising money to people in need, do so because they consider other peoples needs before their own. But is there another way to help people in Africa, besides aiding?

<span style="background-color: #ffffff; color: #404040; font-family: Georgia,serif; font-size: 19.2px;">Date: Friday April, 13 <span style="color: #404040; font-family: Georgia,serif; font-size: 19.2px;">To: Mrs. Sidor <span style="color: #404040; font-family: Georgia,serif; font-size: 19.2px;">From: Elena Medich <span style="color: #404040; font-family: Georgia,serif; font-size: 19.2px;">Subject: MEMO 3

Aiding increased after more people became educated of the problems in Africa. At the moment "...more than 13 million people are struggling to survive..." (CARE). When photographers took pictures of starving children and people without homes, people started to feel that it was their responsibility to help those "...who continue to suffer the consequences of economic failure everyday..." (Moyo 2). Pictures and horror stories about poverty, the situations with child soldiers and the Rwandan genocide are a few examples of why people started to aid more in Africa. One reason why people aid because of the Rwandan genocide, is because the U.S did not take sides, Hutu or Tutsi and many questioned if this was the right decision. "On April 6 1994 the plane carrying Rwanda's president was shot down..." (Peace Pledge Union), triggering the genocide. It was estimated that 800,000 Tutsi were killed during the genocide that lasted under 100 days. The United Nations took some action against the genocide but the United States itself did not and many still believe that the U.S should have been involved to stop the killings.

When people around the world started to find out about the masses of child soldiers in Africa, organizations like War Child started to grab attention about the issue and raise money to attempt to stop children soldiers from getting recruited. " Child soldiers are being used in armed conflict in Central African Republic, Chad, Democratic Republic of Congo, Somalia and Sudan" (War Child). Aiding to help prevent child soldiers started years ago, but organizations still ask for money today and the situation hasn't improved dramatically. Children especially "are in need of urgent, lifesaving, humanitarian assistance" (CARE). "Poverty, hunger, malnutrition, disease, unemployment and environmental degradation" (Volunteer in Africa), are problems that still persist today and people around the world devote their time and effort to stop these problems from continuing.

<span style="background-color: #ffffff; color: #800000; font-family: 'Times New Roman',Times,serif; font-size: 24px;">Date: Wednesday April, 18 <span style="background-color: #ffffff; color: #800000; font-family: 'Times New Roman',Times,serif; font-size: 24px;">To:Mrs. Sidor <span style="background-color: #ffffff; color: #800000; font-family: 'Times New Roman',Times,serif; font-size: 24px;">From: Elena Medich <span style="background-color: #ffffff; color: #800000; font-family: 'Times New Roman',Times,serif; font-size: 24px;">Subject: MEMO 4

Although aiding may seem like a logical solution to help poverty in Africa, there are other solutions that may be more beneficial. For instance, there is an idea called micro lending. "Micolending essentially consists of the disbursement of small loans to people locked out of the banking system, the idea of being to help them to start or expand small businesses that generate income...Some loans are as small as 2 USD but typically they range from 50 to 1,000 USD and are made without conventional credit checks or collateral requirements" (Kaplan 1). The benefits to microlending are this, it stops Africa's dependency on handouts from other countries, and people living in poverty learn to survive on their own. It teaches them to become entrepreneurs and if their business doesn't directly benefit them, then it may benefit their next generation. Also, it has been proven that the "repayment rate is 97% [and] 4,710 villages [are] impacted globally" (World Vision). This alternative solution may be what the continent of Africa needs, they have been receiving aid and handouts from countries for years and still are struggling from poverty today. If aiding, clearly "isn't working" (Moyo 1), then microlending may be a better solution.

Microlending is an approach that many organizations take or are starting to take. All you have to do is "choose an entrepreneur. Read their story and their business idea. Fund all or part of their loan. They start or expand their business. They receive business training based on ethical principles and smart strategies...They earn money to feed their children, send them to school and save money for the future...And then the loan is repaid. Your original tax-deductible donation gets recycled. And another entrepreneur from the same country receives a loan" (World Vision). The process may take a few years, but it could give a family living in poverty, the skills and money it takes to run a business. "Mohammed Yunus [the creator of Microlending and the Grameen Bank] began by lending a small sum to help a struggling furniture" (Kaplan), and the idea kicked off. The problem with aid is that it "...[does] not benefit smaller farmers and projects are often large scale" (BBC 1), so people who need it the most aren't getting any help.The children of the recipients of microlending can benefit from it too if they're receiving an education, they can take over in the business later on or find an alternative job. It encourages people living in poverty to work, and it can help future generations. A person loaning would only have to loan once, and then they could provide more help than what a regular aider would.

A regular aider can only give money to people living in poverty, but eventually that person would need more money. A person who is for microlending, who helps someone living in poverty start a business, would only loan money once, and that provides stability. Then, the person or family short on money can work, and no longer depend on handouts provided constantly by volunteers and organizations from different countries. They then pay back the person who loaned them money, and then hopefully they are stable enough to provide money to other people living in poverty. There have been "3.5 million loans dispersed since 1993" (World Vision), and microlending "has done well in Central America and the Andean region [and] it is just starting to take off in Mexico and Brazil" (Kaplan). If microlending becomes more common in the continent of Africa, aid may not be necessary in a few years. "More than $300 billion of aid...has gone to Africa since 1970" (Moyo 2), and there have been some "serious issues about the way aid... [is] sometimes handled" (BBC). Since the beginning of aid, a genocide has occurred and hunger and disease are two common problems that still persist today. Microlending is the solution, if we can give people in poverty in Africa, money to make a business, then it could be the beginning of a thriving era for Africa. If a person starts working, then the money made starts to flow around, stimulating the small economy formed. Then once a persons debt is payed off, they can provide an education for their children. If their business begins to thrive, and their children are receiving an education, the family once living in poverty is a family similar to one in the United States. The benefits of microlending overwhelmingly outweigh the benefits of aiding, so microlending is a solution that should replace aiding in Africa.

<span style="background-color: #ffffff; color: #800080; display: block; font-family: 'Times New Roman',Times,serif; font-size: 18.7167px; text-align: left;">Date: April 23, 2012 <span style="background-color: #ffffff; color: #800080; display: block; font-family: 'Times New Roman',Times,serif; font-size: 18.7167px; text-align: left;">To: Mrs. Sidor <span style="background-color: #ffffff; color: #800080; display: block; font-family: 'Times New Roman',Times,serif; font-size: 18.7167px; text-align: left;">From: Elena Medich <span style="background-color: #ffffff; color: #800080; display: block; font-family: 'Times New Roman',Times,serif; font-size: 18.7167px; text-align: left;">Subject: MEMO 5

<span style="background-color: #ffffff; color: #000000; display: block; font-family: 'Times New Roman',Times,serif; font-size: 110%; text-align: left;">Some experts do not believe that microfinance is the answer to solving the problem of poverty. They raise "serious questions about the effectiveness of microfinance as a tool for fighting poverty" (Goldmark 2). A controversial issue with microlending is, that it doesn't affect the poorest people living in poverty, or that it's not an effective way to pull someone out of poverty. Muhammad Yunus is considered to be the father of microfinance and the Grameen Bank, which is what he won the 2006 Nobel Prize for. The Grameen Bank is the bank which microlenders use to help people in poverty, because normal banks sometimes do not lend money to those in poverty. "Yunus made a powerful enemy...when he announced that he might start a political party" (Goldmark 1), and that enemy is the Prime Minister of Bangladesh, Sheikh Hasina. <span style="background-color: #ffffff; color: #000000; display: block; font-family: 'Times New Roman',Times,serif; font-size: 110%; text-align: left;">Prime Minister Sheikh Hasina "has accused microlending of 'sucking blood from the poor'" (Goldmark 1), and was apart of the order that removed Yunus from the Grameen Bank. She believes that microlending is not effective in removing people from poverty. She said "we have prioritized food security, social safety and job opportunities as poverty alleviation is the main objective of our government" (Hasina: Steps to widen the reach of microcredit), so she believes in helping the poor but does not believe that microlending is the best way to do it. However, microlending has 4,710 villages impacted globally and "just one donation can be recycled to help dozens of families in the years to come" (Micro). The benefit of it is that there is only one donation and "...[that] donation recycles over and over again to help other hardworking entrepreneurs in the same country" (Micro). For that reason, Yunus' idea proves to be more productive than any other help towards people in poverty. It's unfortunate that the Prime Minister of Bangladesh disagrees with Mr. Yunus because he was removed from the Grameen Bank but he still is "arguably Bangladesh's most famous man" (Goldmark 1), and his idea of microfinance is still growing.

<span style="background-color: #ffffff; color: #0000ff; display: block; font-family: 'Times New Roman',Times,serif; font-size: 110%; text-align: left;">Date: April 25, 2012To: Mrs. Sidor From: Elena Medich Subject: MEMO 6

Leaders as well as authors, continue to oppose the idea of microfiance. Author Lamia Karim recently wrote the book //Microfiance and its Discontents// in 2011. She specifically discusses how microlending hurts women living in rural areas. Karim doesn't believe "that every human being has entrepreneurship potential" (Mishra 1), and that microlending leads to women having complications because they cannot handle money or a business. She argues in her book that "norms and obligations in a rural society are tilted against women" (Mishra 1). In certain countries, it is believed that microfinance institutions "prefer lending to women borrowers because it is easier to shame them into repayment" (Mishra 1). Lamia Karim doesn't believe that women benefit from microlending and that it even is a way to make them more vulnerable than before. For this, she thinks microfinance is a dangerous plan in rural countries where women are not considered equal to men.

Although Lamia Karim brings a valid point against microlending, she left out a few key ideas. First of all, if women do not have the advantage over men, then microfinance could be something they could participate in that makes them more independent. Secondly, it's true that not every person has entrepreneurship potential, but if you are a microlender, then you decide who you are going to lend your money to. You have to choose wisely and loan your money to someone who shows entrepreneurship potential and to someone who you are sure will pay you back. This brings me to Karim's third point. She argues that more microlenders choose women because it's easier to make them pay back their loans. The repayment rate of loans for microlending is 97% and women could be contributing to the high percentage. The point of microlending is to pay back borrowed money so microlenders may choose to loan more money to women if statistics should that they have a higher repayment rate. It's a good thing that women feel more pressured to pay back the loans they owe because when they do, the microlender gets their money back and the woman will possibly be owning a business, something that could give them the same advantage as men. Author Lamia Karim expresses her concern about women and microlending but I do not believe that women have a disadvantage in microfinance no matter which country they live in.

With any plan to end poverty, questions are always asked. Lamia Karim brings the questions about the effects of women in microfinance. She argues that women don't have the advantage in microlending, but they have no more if not a greater advantage than men. If women are viewed as more reliable to repay their loans, then a microlender is going to choose a women over a man because a microlender wants his/her money payed back eventually. Also, if microlenders are people from countries in Europe and the United States, they won't discriminate against women as much as someone from a rural country where women have the disadvantage, would. Women participating in microfiance can give them an advantage that they never had before, they can own a business. Women involvement in microfinance is not an issue, it can even be an advantage.

<span style="background-color: #ffffff; color: #0000ff; display: block; font-family: 'Times New Roman',Times,serif; font-size: 80%; text-align: left;">Date: April 29, 2012To: Mrs. Sidor From: Elena Medich Subject: MEMO 7

Economics professor, Dr. Milford Batemen is another expert who does not believe in microfinance. He believes that "the costs do clearly outweigh the benefits" (Microfinance USA 2011). By this, he means that he doesn't think it's a good thing that "the poor are expected to finance their own way out of poverty" (Microfinance USA 2011). Dr. Batemen may have believed in microfinance at the beginning of its creation but he now "characterizes microcredit as having become corrupted" (Microfinance USA 2011), and general evidence, he argues does not support microlending and does not show growth. He thinks that evidence should come directly from people in poverty to see whether or not people living in poverty are benefiting from microfinance.

Although Dr. Batemen brings valid points, there is not a lack of evidence of the benefits of microlending which is what he seems to believe. There is evidence directly from people living in poverty including repayment and reinvestment rates and the number of loans dispersed. There is also information on how many villages are impacted and which countries are mostly impacted. Milford Batemen also says that its not a good thing that the poor are expected to finance their way out of poverty. However, if we only hand money and supplies to those in poverty, they are only sustained for a little while. They still live in poverty and are dependent on handouts from other people. If they pull themselves out of poverty, with a little help from a loan, they can fend for themselves for the rest of their lives. Dr. Batemen wants to help people living in poverty however, microfinance is the best way to achieve that.

<span style="background-color: #ffffff; color: #0000ff; display: block; font-family: 'Times New Roman',Times,serif; font-size: 120%; text-align: left;">Date: May, 2, 2012To: Mrs. Sidor From: Elena Medich Subject: MEMO 8

Everyone should have the right to help themselves. That's the great thing about microfinance, you have the opportunity to pull yourself out of poverty for good. The basics of microlending is simple, and that keeps it successful. Dr. Yunus' creation has lead to families and independent individuals to have improved lives. Despite arguments, microlending is not a disadvantage for women or any other individual and it should be introduced in Africa. Africa is considered to be the poorest continent in the world and the solution to pulling the majority of the people living there is microfinance. Instead of handing people in poverty money and supplies every few weeks, microfinance will allow people in Africa to start their own business, where they can sustain themselves and not rely on other people. If people in Africa are less dependent on outside countries, then the money spent on aiding in Africa can be put to better use. Anyone can be a microlender and help. "I am only one, but I am one. I cannot do everything, but I can do something. And I will not let what I cannot do interfere with what I can do." -American author and historian Edward Everett Hale


 * <span style="background-color: #ffffff; font-family: Georgia,serif; font-size: 22px;">ANNOTATED BIBLIOGRAPHY **

"Advantages and disadvantages of aid." //BBC - GCSE Bitesize//. BBC, n.d. Web. 11 Apr. 2012. <http://www.bbc.co.uk/>.

From the online article, BBC discusses the advantages and disadvantages of aiding in Africa. The article supports it's ideas with evidence like the country of Ethiopia and how the aiding affects them. This will help me for my project because it directly relates to my question.

"Africa." //Save the Children//. Save the Children, n.d. Web. 9 Apr. 2012. <http://www.savethechildren.org/>.

From the organization, Save the Children, this online article discusses how to help children who are starving in Africa. It describes how the the organization will help children and how to help. This will help me for my project because it allows me to see the views and opinions of organizations in favor of aiding Africa.

Astier, Henri. "Can aid do more harm than good?" //BBC NEWS//. BBC News, n.d. Web. 11 Apr. 2012. <http://news.bbc.co.uk/>.

From the online article, author Henri Astier discuses how aid in Africa may not be as effective as we thought. He included quotes from leaders in Africa and what experts and America are saying about this issue. This article helps me for my project because it directly corresponds with my question.

"CARE EMERGENCY ALERT: Famine and Refugee Crisis in Africa." //CARE//. CARE, n.d. Web. 4 Apr. 2012. <http://my.care.org/site/>.

From the organization CARE, this online article discusses how to help children and families who are starving in Africa. It gives statistics of the people in need and shows the amount of Somalian women in need with children and it encourages everyone to donate money to help these people. This helps me with my project because it shows the views of organizations in favor of aiding.

"Clean water for Africa, Asia and Central America." //WaterAid America//. N.p., n.d. Web. 9 Apr. 2012. <http://www.wateraidamerica.org/>.

From the organization, WaterAid America, this online article discusses how to provide water to those in need in Africa, Asia and Central America. It describes how it is a non-profit organization and its plan to provide water to those in need. This helps me with my project because it shows the views of organizations in favor of aiding.

"Child Soldiers." //War Child//. N.p., n.d. Web. 13 Apr. 2012. <http://www.warchild.org.uk/>.

From the organization, War Child, this online article discusses how children become soldiers and what the affects are. It describes how the organization wants to help stop the issue. This helps me with my project because it shows the views of an organization in favor of aiding.

"David Roodman and Milford Batemen Debate Recap." //Microfinance USA//. N.p., n.d. Web. 25 Apr. 2012. <http://www.microfinanceusaconference.org>.

This online article discusses the debate between experts David Roodman and Milford Batemen. Roodman is for microfinance and Batemen is against it. The article talks about the debate and personal opinions of each. This will help me with my project because it provides the opinion of an expert who is against microlending.

"Genocide - Rwanda." //Peace Pledge Union Information Genocide//. N.p., n.d. Web. 13 Apr. 2012. <http://www.ppu.org.uk/>.

This online article discusses the genocide in Rwanda, the Hutus against the Tutsis. It talks about the causes and effects, and after the genocide. This article will help me with my project because it helps explain why Americans especially, started aiding in Africa.

Goldmark, Alex. "Muhammad Yunus, Father of Microfinance, Ousted from Grameen Bank." //Good Business//. N.p., 2 Mar. 2011. Web. 19 Apr. 2012. <http://www.good.is/>.

Author Alex Goldmark talks about how Muhammad Yunus had been removed from his creation, the Grameen Bank. It discusses how the Prime Minister of Bangladesh, Sheikh Hasina has back lashed against Mr. Yunus and how the reason he was removed from power was because of his age. This article is helpful for my project because Sheikh is one expert who disagrees with my thesis statement.

"Hasina: steps to widen reach of microcredit." //Coast BD//. N.p., n.d. Web. 17 Apr. 2012. <http://www.coastbd.org/>.

This online article discusses the opinion of Prime Minister, Sheikh Hasina about microlending. It also discusses on what she believes is the best way to deal with poverty. This online article will help me with my project because it directly disagrees with my thesis statement, so I can use it for Memo 5.

Kaplan, Eduardo. "Microlending explained." //Global Envision//. MercyCorps, n.d. Web. 16 Apr. 2012. <http://www.globalenvision.org/>.

Author Eduardo Kaplan writes for //Global Envision// and explains what micro lending is, and how it's improved the lives of thousands of people in villages. He talks about how it can be spread, but also some disadvantages of using it. This will help me with my article because my solution to help people in Africa is micro lending.

Moyo, Dambisa. "Stop Aiding Africa!" //The Daily Beast//. The Daily Beast, n.d. Web. 4 Apr. 2012. <http://www.thedailybeast.com/>.

Economist, Dambisa Moyo writes for the //Daily Beast// and discusses how the United States and other countries are not helping Africa by aiding them. She gives her opinion of how to help countries in Africa without aiding. She also talks about the history on aiding Africa and how it's not productive. This will help me with my project because it directly corresponds with my question.

"Micro." //World Vision//. World Vision, n.d. Web. 16 Apr. 2012. <http://www.worldvisionmicro.org/>.

This online article discusses micro lending, what it is and how it benefits people living in poverty. The organization, //World Vision// talks about how micro lending help everyone if people are willing to try it. This will help me with my project because I am talking about how micro lending is the solution to the problems in Africa.

Mishra, Soumya. "Bordercrossing Books: 'Microfinance and Its Discontents' by Lamia Karim." //Governance Across Borders//. http://governancexborders.com/>. 25 July 2011. Web. 19 Apr. 2012.

This online article discusses a book that author Lamia Karim wrote that is not in favor of microlending. It reviews what she has to say about it and what this means about microlending in general. This article will help me with my project because Lamia Karim is one expert who is against microlending.

Quandzie, Ekow. "Cost of sending money to Africa most expensive in the world - World Bank." //Ghana Business News//. N.p., 19 Nov. 2011. Web. 11 Apr. 2012. <http://www.ghanabusinessnews.com>.

From the online article, author Ekow Quandzie discusses how Africa is the most expensive place to send money to in the world. It describes how much more expensive it is to send money to, compare to other countries. This will help me with my project because it directly corresponds with my question.

Tuttle, Kate. "Rwanda." //Oxford African American Studies Center//. Oxford, n.d.Web. 9 Apr. 2012. <http://www.oxfordaasc.com/>.

This online article discusses the genocide in Rwanda, the Hutus against the Tutsis. It talks about the causes and effects, and after the genocide. This article will help me with my project because it helps explain why Americans especially, started aiding in Africa.