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**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 has been common especially in the 21st century after people around the world have realized how many Africans are living in poverty. Whether it is traveling to different countries or fundraising to send money, there are always organizations like Save the Children or Red Cross or Water Aid America that are determined to end hunger and poverty there. However, "Donors...have continued to pursue the aid-based model even when it has become apparent that aid,... is not working." "Even when aid has not been stolen, it had been unproductive"(Moyo 1), so why do we continue to aid today? Since aid has been proven to not be a good solution, there is a better one. Microlending is a simple solution, that consists of helping people in poverty start a business. Microlending can reduce poverty more efficiently than aiding. If we lose money, getting the money to our destination, then the United States should consider how microlending is a better solution to help those 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.

 "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?

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.

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.

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. 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. 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.

<span style="font-family: 'Arial Black',Gadget,sans-serif; font-size: 110%;">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="font-family: 'Arial Black',Gadget,sans-serif; font-size: 110%;">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.

<span style="font-family: 'Arial Black',Gadget,sans-serif; font-size: 110%;">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="font-family: 'Arial Black',Gadget,sans-serif; font-size: 110%;">Everyone should have the right to help themselves. That is 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. 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 microfinance is the way to get the majority of the people living there, out of poverty. Instead of handing people in poverty money and supplies every few weeks, microfinance will allow people 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 can be put to better use. Anyone can be a microlender and help. As American author and historian Edward Everett Hale once said, "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."