Fighting Poverty and Creating Jobs through Crowdfunding

Mar 20, 2018 11:39:57 AM / by Eduard Tee, COO | 2 minute read

With crowdfunding, it is very easy to contribute to the global fight against poverty. In order to reach this, creating jobs is considered the most important instrument. For instance, you can provide a new entrepreneur with a small loan through crowdfunding easily, so he is able to start building a life for himself and his family.

However, it is also possible to support more experienced and successful entrepreneurs with a bigger loan, so they can expand their companies and create even more jobs with this funding. For these type of companies, it is really hard to find options that provide them with financing. These small and medium sized companies (SME), do not always have the option to acquire loans from banking institutions. Unfortunately, microfinancing is not a suitable option either because their companies have outgrown the requirements. Basically, they are stuck in the middle while the growth of SMEs is crucially important for these countries’ development. This is the reason why this segment is called the 'missing middle', and crowdfunding can provide a great solution for the lacking of this segment.

 

Providing Loans to Entrepreneurs

There are crowdfunding platforms with a focus on providing small loans to entrepreneurs in emerging economies. These loans are mostly against a zero percent interest rate.

However there are also companies, like Lendahand, that focus on providing loans to entrepreneurs in developing countries against an interest rate that eventually will be competitive. Parties like Lendahand will grow even more, so the interest rates entrepreneurs have to pay in those countries will drop. If combining social impact and receiving financial returns sounds appealing to you, you should take a look at the different projects that Lendahand offers.

You can choose several projects with interest rates from 3 to 6 per cent in different countries (Kenya, Zambia, India, Indonesia, Mongolia, Colombia and many more) in different continents (Asia, Africa, South America).

The impact you can create varies from fighting poverty by creating jobs to providing villages in Kenya with solar energy, so they are no longer dependent to toxic, environment unfriendly fuels like petroleum.

By giving people who care about making a social impact the ability to also earn money on their contributions, we are helping create a sustainable system to fund entrepreneurs well into the future. 

Topics: crowdfunding, lendahand, impact investing

Eduard Tee, COO

Written by Eduard Tee, COO

I think it's important to be able to work with people who are trying to achieve a common goal, a unit in which everyone has their role. I see the role of Lendahand in society as people make clear that financial returns and helping others go very well together.

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