Microfinance: Providing Two Waves of Education

Abstract

In September 2000, United Nations member states gathered for the United Nations Millennium Summit and agreed upon a set of eight development targets, which became known as the Millennium Development Goals. The Millennium Development Goals aim to eradicate extreme poverty and hunger, achieve universal primary education, promote gender equality, reduce child mortality, improve maternal health, combat HIV/AIDS, ensure environmental sustainability, and develop a global partnership for development by the year 2015. The year 2005 was declared the “International Year of Microcredit” by the United Nations and in 2006; Muhammad Yunus and Grameen Bank were awarded the Nobel Peace Prize “for their efforts to create economic and social development from below.” The Nobel Committee claimed, “Lasting peace can not be achieved unless large population groups find ways in which to break out of poverty. Micro-credit is one such means.” As microfinancing is becoming more utilized as a development tool, it has become necessary to research the impact this strategy has on achieving the Millennium Development Goals. This paper looks to examine what microcredits are, how microcredits work, the spillover benefits created by microcredit programs in the areas of women’s empowerment and improved health and welfare programs, along with what the results are of implementing this type of development strategy in rural areas to achieve Millennium Development Goal 1- the eradication of extreme poverty specifically in the Asia Pacific region. Former Deputy Secretary-General of the United Nations, Mark Malloch Brown, was quoted saying, “Microfinance is much more than simply an income generation tool. By directly empowering poor people, particularly women, it has become one of the key driving mechanisms towards meeting the Millennium Development Goals, specifically the overarching target of halving extreme poverty and hunger by 2015.\"