DEBT FOR A CAUSE!

Debt, all of us do not want to have a debt to anyone. The initial thinking is that once we borrow money from someone or in any lending companies, we will be buried to that debt for our entire life. At some point of this issue, it has been true. But at the present day, lending has already been legal. They are what we call as microfinance companies. This company aims to help small entrepreneurs to build their own business. They offer a contract to small entrepreneurs like those of markets or mini groceries so that they can start their own business. But there are so many discussions and issues about this kind of program brought about by these companies and most of the time, the discussion about the pros and cons of joining microfinance have been both true. The deliberation between microfinance and its borrowers has been unending because of their both acceptable point of views about taking the issues.
Microfinance has been famous all around the world. They are lending companies that are willing to lend money to people who need it. Behind the success of these lending companies is one of the famous microfinance ‘boss’ named Muhammad Yanus. He is the one of the world’s largest microfinance persons and he even won a Nobel Prize in recognition of his hard work. His microfinance company is called Grameen, a famous lending company that is now operating across United States. However, it is hard to build trust in doing this business especially if you will get to know that the interest rate is 40% out of your borrowed money within an agreed period of time.Thirty years ago, Muhammad Yanus started to spread their business up to Bangladesh to help small entrepreneurs to start their business. They encourage small people there to have an agreement with their lending company that may be more beneficial to them. Some people agree on it, while some do not. At first, the experiment was a success since borrowers pay on time. However, as the business is at its peak of success, there they face their problems and issues. Economic recession has happened in America making them into a big slump of adjustment. But, Grameen believes that it will be temporary and that they will still overcome those “challenges.” As what Grameen is expecting, it then happened but, the large issue that came is that, before they were able to get out of that situation, they first put its burden to their people, to their borrowers. That is the first issue that microfinance is facing. People tend to think if they will really give their trust to Microfinance Company since there are times that microfinance companies tend to be inconsistent from their rules with their borrowers. There are times when they increase their interest rates. With this, it will greatly affect the borrowers since there are also times that they are affected by such economic issues and then interest rates will increase, then, it will be such a burden. Second issue is that microfinance companies pressure their borrowers to pay for their debts even if there are times that they cannot because the money they get are not all stable. Kiviat B. (2009,January 11) Can Microfinance Make it in Americ? Time, 56-57. There are times that it is good and there are times that it is not. However, if we will look at it, we can see that it is right for the company to ask their borrowers for their payment every time the desired schedule has arrived. Borrowers have to be prepared for their payments since they had agreed from their contract that their schedule of payment is in that certain schedule.

The pros and cons in accepting microfinance in the industry are quite controversial. Even though they have their point of views in having such issues, it is still hard to decide what side this industry should be of. However, if I were to think of it, I think microfinance is not bad. It is not bad because it actually give chance to people to gain their own success. They are helping small entrepreneurs to have their chance to enter a large industry. I would also disagree if microfinance would be banned from operating because if they will be banned, then how about those people that aims to have their chance to do a business even if they don’t have any capital, at least they may have a choice and think of borrowing money from this lending companies.If borrowers will make use of their effort on how to take care of their borrowed money, I’m sure they can keep track of it. I’m sure they will not be buried to their own debts. We all just have to be wise on how we can ensure our money’s circulation in this industry.
Kiviat B. (2009,January 11) Can Microfinance make it in America?

Time, 56-57