Three Ways Microfinance Banks Benefit Nigeria
In 1976, a young banker by the name of Muhammad Yunus discovered that making extremely small loans to people living in the worst poverty in the outskirts of Bangladesh could have a huge impact on their ability to pull themselves out of poverty. Not long after, the Grameen Bank was formed, which pioneered the concept of microfinance. From the earliest days, the Grameen Bank focused predominantly on issuing microloans to women in particular. Now, more than 4 decades later, microfinance has gone global and is helping impoverished communities the same way that Grameen did in Bangladesh. Nigeria has been one of many countries impacted by the introduction of microfinance. Here are three ways microfinance is helping women and girls in Nigeria.
1. Financial independence
Women who are dependent on men for support and even survival are at the highest risk of domestic violence and abuse. One of the ways that many cultures subjugate women is by not allowing them to own property, own their own business, produce their own income or have access to an education. When women have access to small loans to start their own businesses, they gain economic freedom. Women who can support themselves financially set themselves free of their dependence on men, which makes them significantly less vulnerable to exploitation.
2. Stronger communities
One of the many reasons that the Grameen Bank chose to focus on helping women improve their circumstances was that they found when they invested in women, they, in turn, helped to improve the condition of the entire community. The Grameen Bank found that when they made loans to men, they used the money to improve their own circumstances, but not necessarily those of their families or communities. Providing microloans to women in Nigeria helps entire communities lift themselves out of poverty.
3. Creates a sustainable cycle
Numerous charities have tried without success to improve social and living conditions in Nigeria for decades. As long as aid is flowing, conditions may improve marginally but tend to revert right back to previous conditions as soon as the aid dries up. While charity may provide relief for immediate needs, it doesn't provide sustainable relief. A microloan, however, can help a woman begin to generate income that can then be reinvested to create more income. Over time, as her income multiplies, it allows her to pull herself out of poverty.
