The role of microcredit in poverty alleviation programs

The change of perspective in the programs of development aid: the donation credit. The methodology of microcredit has revolutionized the way we think about development aid programs of international cooperation. It is in fact a tool that stimulates the production activity and the dignity of people who are given an opportunity for growth that is not donated, but "given". Indulges in this sense, the logic of pure gift that much damage has often traveled to the consequences of forced charity programs and establishing mechanisms of addiction.  

What is recognized is the confidence in the ability of the person: the loan even before the money is trust microimprenditore for their project. Economic development is supported in this case through the empowerment of small-scale entrepreneurs, as players and supporters of its growth. Those who receive a loan are encouraged to work hard to return: for them is a chance that if it fails, will not be repeated easily. The attempt of any plans for microfinance / microcredit is to create the conditions for sustainability of programs and institutions who take part, or their full operational independence from external financial assistance and creations, therefore, the conditions for a continuous and lasting operation. In developing countries it is very important to the contribution that the informal economy gives national economic development. The informal sector, not recognized by small farmers, artisans, traders attempt to survive the economy of exclusion. Micro-enterprises are as Key to Growth of well-being of local communities as well as the main source of income for millions of people. The activities of these various micro-projects with their economic and social redemption can come together to contribute up to 50% of some national economies. According to UN agencies in the world today there are 500 million small firms, but only 2% have access to credit. Aiming at the strengthening of these activities, seeking to reinvigorate the most vital economic sectors, which may allow increased employment, the circulation of resources and investment opportunities.

 

The credit goes to savings in many cases. In some programs,the savings from the poor must precede the application for credit. In this case a small amount of credit obtained is retained and allocated to a compulsory savings fund that serves both as additional collateral, in order to encourage a savings culture among the poorest segments of the population, in order to plan the economic resources according to the needs of the family. The savings also means greater security to deal with unexpected situations of crisis and natural disasters: prevention is taking root in the culture of these communities. A level of Microfinance Institutions of the savings is more commonly used as loan collateral (cash collateral) that is not returned, even if unpaid, until the loan is not paid off: only institutions authorized to collect savings can take these measures. The instrument of saving is very important for institutions that are focused on achieving its own sustainability and that of promoting programs, because they can rely on this as a revenue source to be mobilized.