Last Friday, I introduced you to the mechanism of micro-finance as a catalyst of the future world economy.
Using Bangladesh as an example, we examined how the most dire straits can be turned into a promising course of action for many of the world’s most destitute people.
Now, I want to tell you how the digital age is making it possible for you to take part in building markets from the ground up – from right there at your computer.
Organizations such as Rotary International have been encouraging the development of entrepreneurship and smart financial planning for decades. Operating in 163 countries through its 30,000 Rotary clubs and 1.2 million members, Rotary has provided small-scale financing and training in various lines of work that are especially amenable to business-building.
Nowadays, of course, computer skills are essential to peddling one’s wares to a global consumer base, so Rotary focuses in large part on training micro-business owners to deal with computers as they learn the ins and outs of borrowing, repayment, hiring and producing.
In the United States, the federal government provides assistance to small businesses through the Small Business Administration. This helps small businesses get going by helping to navigate available tax breaks, building equity, and securing six-year-term micro-loans.
In the US, SBA community-administered micro-loans average about $10,500.
In countries like Bangladesh, a mere 100 bucks can be enough to give a good idea a boost to fruition.
That’s where you come in.
PayPal it Forward
In a world where interactive online exhibitions and Discovery Channel specials show you just how many people have been left behind by the Industrial Age and the rise of the Web, it is easy to feel desperate about the world’s prospects for prosperity.
If you are reading this letter, you are enterprising enough to seize all sorts of opportunities. But the future reserves of Wealth Daily readers are in the hills and hinterlands.
Unitus.com is a website where all of you – the present and future go-getters – can interact constructively.
Headlines like "Rich Yanks Pay it Forward" have graced articles about Unitus.com and the link it creates between those of means and those with dreams alone.
As a privately-run non-profit organization, Unitus.com is unique in that it both operates independently of government grants and also is able to offer intact financial relay by having its operating costs covered by donors.
Unitus.com calls itself a "microfinance accelerator," and its reasons for wanting to augment the worldwide MF infrastructure are clear:
80 million people are currently served by Microfinance Institutions (MFI), but that 80 million only accounts for around 16% of the actual global demand for such non-traditional financial services.
Is it dangerous to deal with "informal" lending institutions? Well, yes. But I remind you that there is a reason the US government established the Federal Deposit Insurance Commission (FDIC) – banks in general are no more immune to falling on their faces than is the corner ice cream store.
Like making ice cream though, the risk you take can have sweet results for loan initiators and loan recipients alike. Unitus.com simply presents a brand-new model, and one custom fit for the Internet.
Have you ever used eBay? Well then, chances are huge that you have been asked to remit your winning bid using PayPal, an eBay-owned company that allows anyone with an email address and a bank account to exchange funds with anyone else in the same situation.
On Unitus.com, you can use a PayPal account to make yourself a lender, instead of using it to pay for those matching Elvis tour jackets you just had to buy at 3 a.m.
You won’t earn interest, but you will get your money back from Unitus.com after a six-month period.
Is this for real?
Contributing to a microfinance accelerator is not the same as sending your Benjamins to Bangalore and hoping for the best.
Unitus.com is run by experienced microfinance professionals, some of whom came straight from the Grameen Foundation I focused on last Friday. These people know how to pick MFIs that are both trustworthy and efficient, and that’s where your money will go.
Accountability is of the utmost importance as investors like you seed the fields of future profits. The sad fact is that the world’s poorest countries are also the most corrupt.
Of the 16 most seriously corrupt nations, according to Transparency International and Forbes, 9 are in Africa, 2 are former Soviet republics, and the others are in Asia and Latin America.
That means that bribes and intimidation play as great a part as genuine kindness and stable bureaucracy in the disbursement of financial and food aid.
The prospect of piracy is frightening, but the promise of profit and sustainable economic health is too enticing for us to forfeit.
PayPal it forward.
– Sam Hopkins