The IFC report about microfinance puts light on the fact that microfinance sector is still able to reach less than 20% of its target market that is comprised of 3 billion low income people. According to World Bank, poor are earning less than $2 per day which is an alarming sign.
The Global Development Research Center’s website informed that as per World Bank’s developing countries estimate, there are more than 7000 microfinance institutions catering approximately 16 million potential customers. The industry possessed total cash turnover of $2.5USD billion. The latest figures of IFC (2014) showed $519 million investment in 47 MFIs projects.
The Concept of Empowerment
The word empowerment has been used in multiple aspects including women empowerment, employee empowerment and others. The simple definition of empowerment is delegation of power or authority or giving of ability. However, in broader perspective, empowerment is used to describe a comprehensive array of ideas, encompasses several policies and intervention strategies associated with the growth phenomena and combating challenges.
The Concept of Entrepreneur
Entrepreneur is a person who brings creative ideas into practice by taking initiative and risks to bring his ideas into the real world. As per the definition that our beloved entrepreneurs love to adhere to, as entrepreneur is a person who chooses to work according to his own rules. An entrepreneur’s skills, expertise, strategies, hard work and passion are the things that keep a business running and managing the resources efficiently and effectively for its survival.
Microfinance as the Means of Entrepreneur Empowerment
People were having ideas and skills, but they lacked funds for their businesses. Microfinance has identified this basic need of small business owners and came up with the opportunity to provide micro loans to both males and females. Initially, the motive of microfinance was to empower women but later on the concept advanced to allow males to get loans for their businesses. In developing countries, we have seen remarkable growth in this industry.
Previously, farmers were having lands but did not have enough money to buy fertilizer and seeds, though they have the knowledge how to sow, look after the crops and harvest. The Microfinance Institutions (MFI), along with non-government organizations, has worked together in giving loans to people living in rural areas. The amount of loan, though, was limited but was enough for farmers to grow crops. As soon as they harvest their crop, the farmers use the money they get after selling crops to pay the loan back. This directed them to use their existing resources in building a consistent mean of income.