Growing urbanization goes hand in hand with growing consumer demand for food Cities are where we find large concentrations of consumers for the end-product of our food systems and it is the responsibility of cities to ensure that all their inhabitants are food-secure....
Microfinancing: Alleviating Poverty Sustainably
Paul Hawken, in the book Ecology of Commerce, wrote:If you look at the science about what is happening on earth and aren’t pessimistic, you don’t understand data. But if you meet people who are working to restore this earth and the lives of the poor and you aren’t optimistic, you haven’t got a pulse.
With 2015 around the corner, one question dominates—what we are doing to eliminate poverty from this world? This is a world of challenges, but these challenges can also present opportunities, especially if they kindle a new spirit of innovation, mutual respect, and mutual benefit.
The spectacular growth of the microfinance industry has been fueled not by market forces but by conscious actions of national governments, non-profit organizations (NGOs), and companies who view microfinance as an effective economic tool for alleviating poverty. Since much of the impetus behind this increasing support for microfinance hinges on the assumption that its economic and social impacts are significant, it needs to be examined more closely from a sustainability point of view. After all, socio-economic impact is the one of the key considerations for any conversation or business strategy focused on sustainability.
UPS Partnership with Opportunity International
UPS is the world’s largest package delivery company and a global leader in supply chain and freight services. As part of their CSR efforts, the company launched the UPS Foundation. The foundation focuses on helping underserved communities through economic literacy programs, and supports emerging entrepreneurs through grants to innovative micro enterprise organizations, like Opportunity International.
Opportunity International provides microfinance loans, savings, insurance and training to over 5 million people working their way out of poverty in the developing world. Over the past five years, UPS has contributed $945,000 to Opportunity International to support microfinance work in India. Through this partnership, more than 1,600 new clients have received loans—averaging $136 for the first loan—and accompanying counsel, benefiting nearly 7,000 people. In 2011, The UPS Foundation also supported the provision of 1,134 school fee loans that helps bring education within reach for children in struggling communities. India is home to at least 1/3rd of the world’s poor, and education is the most rational step towards alleviating poverty.
Use of technology for microfinancing
As part of its corporate social responsibility efforts, SAP AG has teamed up with PlaNet Finance to play a role in assisting microfinance organizations with technology software. SAP has made a commitment to provide financial, software, and expert assistance to PlaNet Finance, a leading international non-profit organization that offers support services to microfinance institutions (MFIs). Based in Paris, PlaNet Finance’s international network holds activities in close to 80 countries around the world and benefits more than 8 million people. By leveraging new technology, SAP and PlaNet Finance plan to improve the existing microfinance offering through better access to education and skills training for more people in need worldwide.
Social Innovation —No Longer a Myth
According to the World Bank, five hundred million people living in poverty could benefit from a small business loan and only 1/3rd of the world’s population has access to any kind of bank account. The combination of economic value created by successfully established businesses is only one side of the critical socio-economic equation. On its own, microfinance cannot alleviate poverty, but it can be an effective part of the solution if implemented well and accompanied by other social empowerment measures.
If successfully established businesses direct some of their CSR budgets towards microfinancing activities, they could effectively empower the lower segments of society financially, thereby leveraging the creative and entrepreneurial capacity of the poor. In short, coupling microfinancing activities with CSR programs may provide “win-win” opportunities that should not be missed.
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