Microlending: How Tourist Dollars Can Aid Communities In Need

Spiritual Travel, Travel Philosophy, Volunteering & Giving Back, Websites and Blogs — By on January 13, 2010 at 6:00 am

By Shadia Garrison
Socially Conscious Travel Correspondent

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World travelers are typically not only interested in seeing exotic sights, meeting new people, and challenging their bodies and minds in varying ways; as we travel, many of us also become concerned about some of what we see and are compelled to work towards improving our planet in large and small ways. Cheesy? Maybe, but only because it’s true.

One way to help communities across the globe that is gaining more and more traction is micro-lending, sometimes called microfinance or micro-credit. This is the practice of providing small loans to individuals or cooperatives of individuals in order for them to start their own businesses. And really, small means small. We’re talking as little as $75US in some cases.

Here’s an example of how one microlending project could work:

A family is living in poverty in the mountainous region of Tibet. With no income, conventional banks will not lend the family money. But microlending organizations will. The organization works with the mother of the house, Tina, to create a business plan, including a budget, timeline, marketing strategies, and loan repayment plan. The organization provides a six-month loan for $100 to help Tina buy yarn and dye to knit sweaters that she will then sell. Sometimes the organizations also provide direct social services for families involved in its projects – like health care, education, and financial counseling.

Tina hires another local woman to help her make and sell the sweaters to community members and travelers. Part of the money they make is used to buy more supplies, part is used to repay the loan, and the rest is used to pay themselves and buy needed items and services. These projects lift people out of poverty, help communities help themselves, and the generated income is used for education, food, housing, health care, and other community needs. The repayment rates are excellent, reported as being higher than student loan debts in the U.S.!

How is microlending linked to tourism, you ask? As tourists and travelers become more sophisticated and interested in experiencing not only the physical beauty of a country but also its people and culture, we can thank microlending for:

1. Helping small communities survive and even thrive by keeping people there instead of fleeing to often overpopulated cities. These smaller communities retain traditions and cultures that we are then able to experience and enjoy in our travels.

2. Encouraging the local production and sales of traditional dress, jewelry, pottery, and other items that we can bring home as souvenirs, knowing that with our purchase we’re helping a community, instead of buying mass-produced, plastic tchotchkes available anywhere.

3. Allowing folks to take charge of their own communities which could lead to major advances in ecotourism and sustainable tourism efforts led by local people.

Indeed, there’s even been talk of using microlending itself as a new mode of tourism. Trip Sweeney proposed microfinance tours replace the repulsive “slum tours” that have been on the rise. And the Grameen Foundation, a major player in microlending, is offering a trip to one of its projects as the grand prize in a fundraising challenge they are currently promoting. (See my own Grameen fundraising page here.)

It’s very easy to support microlending projects. By donating even a small amount of money to one of the many microlending nonprofit organizations, you’ll be doing a lot of good. A few that are particularly well-respected include:

ACCION International
Kiva
Grameen Foundation

There are many others but as with all the charities you choose to support, before you give, make sure to check out their standing with an organization such as Charity Navigator, the American Institute of Philanthropy’s Charity Watch, GuideStar, or even the Better Business Bureau.

If you don’t have the cash to donate yourself, ask others to donate in your name or as a gift to you, or at least spread the word about the growing and successful field of microlending. Let us, as travelers, be a part of this exciting trend in international development.

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Shadia Garrison is the founder of Mindful Tourist, a site dedicated to socially conscious travel. She believes travel is an important way to deeper cultural understanding and peace on earth. Shadia’s philanthropy experience comes from her 14-year career in the nonprofit/foundation world, serving as a program officer, grant writer, and educator in the areas of underserved populations, international health, and barriers to health care. Shadia is particularly interested in active and locally-directed projects that are sustainable in the long term. She holds a masters degree in public health from Indiana University (go, Hoosiers) and lives in the Washington, DC area.

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