By Gabriella Buono, Volunteer

Independence is something all humans crave. We all desire the power to make our own decisions, provide for our family, and be financially independent. When we have these things, it instills confidence, security, and joy in us. For many parts of the world a microloan is the start to independence.

Microloans are small loans that provide capital to burgeoning entrepreneurs, who don’t typically have access to traditional loans or investors. This concept was deveoped by economist Mohammad Yunus in the 1970’s. He offered loans to poor women, who then turned that investment into a small business which allowed them to support their families.

Microloans give those in poverty a chance to break the cycle. Just like for any start-up, these loans are given to someone with an idea and a talent. Those recipients take that money and invest it into their business – whether that’s buying beads to start a jewelry store or chickens to start their egg distribution company. Once that business is turning a profit and that loan is paid back, the money is circled back into the system to help another entrepreneur. These loans stimulate the economy, which create jobs for others, therefore lifting up the community as a whole.

Since 2013, Project Ethiopia has awarded micro loans to the very neediest in the community – those who cannot access credit through traditional financial institutions. These efforts started with a single fund of $5,000 dedicated to the residents in one of the 34 kebeles (communities) where Project Ethiopia works. Seeing the impact of this small, but powerful approach, the organization started a second fund in 2019 and a third this year each benefiting a new kebele and its residents. To date, Project Ethiopia has made 101 loans to 58 women and 43 men. Even more impressive, all completed loans have been fully repaid on-time!

More than 700 million people, or 10% of the world population, still live in extreme poverty. Surviving on less than US$1.90 a day. Microloans are one way to give those in poverty a chance to pivot into financial independence. And like for all humans, that independence brings confidence, security, and joy.