Muhammad Yunus is considered the father of microloans. This scholar turned banker established the Grameen Bank and focused all his efforts on extending his microloans to the people who needed them most.
From the start, his focus was on women. 97% of all his microloans went to women. This was not done out of the kindness of his heart, but his instincts as an investor. Simply put, Yunus believed (and still believes) that investing in women is the wave of the future.
By empowering women – many of whom had literally never handled money before – he empowers all of society.
In an interview, Yunus listed five reasons he focuses his lending primarily on women.
It is a Woman’s Right
Access to capital, or credit, is something all people deserve. Many of the women who take microloans have literally never handled money before. Many of them come from countries or areas where women are excluded from all financial matters. Yunus belives in financial equality for all.
Untapped Labor Pool
When women receive microloans they put that money into building businesses and communities. Putting themselves out in the market makes these women more confident in themselves and their abilities. Women are able to grow jobs and help communities in ways never done before.
Wealthier and Healthier
It has been reported that women who received microloans tend to adopt healthier lifestyles, both for themselves and their children. They make positive life changes that impact their mental and physical health.
Making Better Use of the Microloans
Female borrowers, according to Yunus, rarely spend the money they borrow. Instead, they invest it in items that have long term benefits for themselves and their families. Instead of buying food, they buy seeds or livestock. This results in women using that initial loan money as a way to provide for their families permanently.
More Likely to Repay
From the strictly business-driven perspective, women are much less of s financial risk, and significantly more likely to repay the loan. At commercials banks where males are by a wide margin the borrowers, traditional repayment rates are around 70%. Yunus’ microloans have a repayment rate of 97%. So lending to women is just good business acumen.
Microloans aren’t the only kind of small-dollar loan on the market. National Small Loan is a step above “micro” and offers installment loans of $100 to $500. Our loans can be paid back slowly over time, or as quickly as you like.
Apply today, or reach out to us with any questions. We are eager to work with you.