Bank (Power of) One

Name: Ivonne Soincilier

Location: Trou-du-Nord , Haiti

Activity: Home Products Sales

Loan Amount: $1,200.00

Loan Use: Purchase soaps and wax in bulk as well as materials for constructing a business stand

Repayment Term: 6 - 10 months

In addition to AIDS, civil war and drought, many African nations find themselves tightly ensared in the debt trap.Like many developing countries, most nations in sub-saharan Africa have become thoroughly dependent on foreign loans for more than a generation.

A traditional story is that, after decolonization, many developing countries turned to the International Monetary Fund for the capital financing so crucial in economic development. The IMF tended to loan money to the most desperately poor countries on condition that they reduce government spending and open their markets to foreign trade.

But in many cases, whether because of corruption or political instability, these nations fell behind in repayments and ended up in the scenario of relying almost soley on loans and foreign aid just to repay the initial loans. In some cases debt and foreign aid comprised 100% of GDP in these countries.

Now, thanks to the internet, we can give more loans to help foster economic development in these countries.Instead of huge banks lending to poor governments, websites like www.kiva.org encourage you--the banker--to lend small amounts of money (as little as $25) directly to local entrepenuers.

These microloans help to finance everything from a one-woman peanut butter shop in Uganda to tiny dairy farms in Azerbaijan. With liasons on the ground in these developing countries, Kiva allows citizen-bankers to personally select loan recipients and sees that 100% of this much needed capital is delivered in as little as two days.

Over the duration of the loan (up to one year) you can recieve email updates about the status of the business that you helped to fund.And before you start to think that these are just charitable donations, keep in mind that through Kiva’s system 100% of these loans have been repaid on time.

In the battles about whether Globalization of free-market forces leads to more dependency in developing economies, the principles of microfinancing might be the best place to build a common understanding of how to start making a difference $25 at a time.