credit access in CubaCuentapropistas, small and medium-sized Cuban private enterprises, do not have access to the assets they need in order to continue to prosper in Cuba. Since the initiation of President Raúl Castro, the amount of private business owners has tripled and the number of nonagricultural co-ops and individuals renting property has also continued to grow. For a continuous trajectory, credit access in Cuba for these cooperative enterprises and individuals needs investments and working capital.

There are over half a million legally registered cuentapropistas in Cuba and the numbers are still rising. These Meso, Small and Micro Enterprises (MSMEs) are an important economic asset to both Cubans and travelers, providing them with a wide variety of goods and services, creating employment and generating income.

Although microfinance lending has widened, it is still very limited. Statistics collected from the Central Bank of Cuba showed that in the wake of the government banking reform in 2011, 378,011 people received financing worth $135 million between the years 2012 and 2014. Only 34 percent of lending went to sole farmers and small enterprises, while micro enterprises accounted for about 2.6 percent. 63 percent of the loans that were lent went toward financing the construction of homes and renovating businesses.

Microcredit has been available in Cuba solely through local banks, as opposed to international banks or NGOs, which has presented a number of disadvantages to its success. Many Cubans lack a credit history, which has ruined the credibility and creditworthiness of borrowers. Another obstacle hindering credit access in Cuba is the lack of knowledge of the usage of credit among business owners primarily due to the many years of the nation’s state-owned and-operated political and economic system.

However, this has not stopped Credit4Cuba, a nonprofit foundation established in the year 2015 in the Netherlands by Marije Oosterhek and Dennis Schmidt. This organization is making a difference for cuentapropistas by supporting small and growing enterprise development in Cuba. Credit4Cuba works closely with existing groups in Cuba by providing the proper practical training and coaching assistance to entrepreneurs hoping to enter the world of cuentapropistas in order to expand their existing business.

Aside from offering training and coaching, Credit4Cuba aims to set up a social impact hub in Havana. It hopes to create a social community where entrepreneurs can meet to interchange experiences and collaborate on ideas in order to create opportunities and join efforts toward developing their businesses. In the near future, Credit4Cuba will work to connect cuentapropistas with social investors, entrepreneurs and trainers worldwide, provided that all participants will contribute toward the Sustainable Development Goals and work to create a positive influence in Cuba.

Microfinance organizations similar to Credit4Cuba, like the Grameen Bank and Kiva, are not only helping the economy for developing countries to prosper, but they are also contributing to the reduction of poverty. Credit access in Cuba for small business owners is slowly moving in the right direction.

– Zainab Adebayo

Photo: Pixabay

Facts About Microloans
Today’s world economy is dominated by big businesses and cut-throat hierarchies. Microlenders finance those who may be left out of the typical business model, such as underprivileged or under-qualified entrepreneurs, by giving them microloans.

There are numerous nonprofit microlenders that focus on helping aspiring businessmen and women enter the marketplace. Organizations such as Kiva, Zidisha, the Business Center for New Americans and Grameen America strive to provide clients with the loans they need in an educational and sustainable way.


Here are 10 Facts About Microloans.


  1. Microloans are typically for no more than $50,000, hence the prefix “micro.”
  2. Microloans allow new business owners to take care of startup expenses. It can be extremely difficult for entrepreneurs with little disposable income to receive funding to begin their projects, which is where microloans come in. Most microloans lay the groundwork that allows businesses to survive on their own. For example, an entrepreneur who is hoping to sell dairy products may need a small loan to purchase two cows. After making this purchase, the business owner may keep breeding the cows and selling their milk, becoming more and more financially independent and eventually repaying the creditors and turning a profit. In this case and many others, the initial loan is crucial to the entrepreneur’s eventual success.
  3. The requisites for obtaining a microloan are more attainable than those of a traditional loan. The process of choosing who receives microloans is generally more personal, according to the microlending nonprofit Accion. The organization states that “it’s about your character as a business person, not just your credit score.” Though traditional financial factors are considered, microlenders look at the whole picture.
  4. Nonprofit microlending organizations largely work to educate aspiring entrepreneurs in struggling communities or developing nations. In addition to helping with loans, these organizations aid in business training and often build strong relationships with their borrowers. This can help someone with little business background find footing in the small business world more easily. These microlenders tend to charge little to no interest, making them more accessible to more applicants.
  5. Different microlending organizations specialize in lending to different groups of people. For instance, Zidisha provides microloans to entrepreneurs in developing countries, whereas the Business Center for New Americans works specifically with refugees, immigrants and other marginalized Americans. Grameen America fights economic inequality by loaning to women stuck in systems of poverty.
  6. Some microloan organizations utilize crowdfunding. Kiva, for example, posts approved loan requests online. Supporters from all over the world can view vendor profiles and project descriptions and lend as little as $25 to each project. The vendors update their lenders as their businesses grow, providing evidence that lenders can use their economic privilege to help produce sustainable outcomes.
  7. To boost financial outreach and follow up on repayments, organizations like Kiva sometimes use field partners to facilitate transactions. These partners act as intermediaries between lenders and borrowers. A downside to these partner loans is that the partners may charge the borrowers interest. Kiva’s direct loans, on the other hand, are always interest-free.
  8. Microlenders must acknowledge that their loans will not always be repaid. Kiva recognizes that borrowers occasionally fail to move their businesses in lucrative directions and that repayments are not always possible. As a result, the goal for such an organization is that borrowers repay their lenders as much as possible, even if they cannot completely refund the original amount.
  9. Microlending preserves a sense of pride on the part of the borrower that donating does not always maintain. The recipients of microloans are not merely given their requested funds but rather enter partnerships with their creditors. They are responsible for what they do with the funds by the repayment system. Many organizations believe this is a more sustainable way to create economic change than donations.
  10. Microlending may seem small, but it can have community-wide effects. Microloans can have, as the Kiva website describes, a “ripple effect,” especially in developing communities. In whatever form they take, the loans generate empowerment and opportunities that can pervade the entirety of a borrower’s community.

Microloans are vital to the success of small business ventures around the globe, enabling businesses that would be ineligible to receive traditional loans to grow and thrive in the competitive market. These 10 facts about microloans show that anyone can be a microlender. Go to any of the previously mentioned organizations’ websites to learn more and make a difference in someone’s community today.

Sabine Poux

Photo: Flickr

EducationIn the Arabic language, the word ‘hidaya‘ means “to lead and to guide.” This is a central theme of the Hidaya foundation as it seeks to perpetually guide orphans and disadvantaged individuals to an educated life.

Since its official launch in 1999, the Hidaya Foundation has participated in solutions to a wide range of global issues: making potable water accessible, planting trees, helping individuals create small businesses and more. The foundation also addresses public health issues through a dissemination of healthcare programs and medical camps to regions where treatments are difficult to obtain or simply not to be found.

Though it participates in many facets of humanitarian work, the principal aim of the Hidaya Foundation is to create educational opportunities in remote and impoverished areas. However, Hidaya’s founder, Waseem Baloch has pointed out that the promotion of education by itself in impoverished regions can be futile without other methods of support. “We realized that when people don’t even have one proper meal, how can they worry about education? Hence we support social welfare and health care as well.” Baloch said.

The Hidaya Foundation achieves its objectives by providing subsidies for orphans, operating and maintaining schools, funding education for impoverished individuals and even providing education courses to adults. In addition, the organization diverts at least half of its resources towards projects that center around agriculture, farming, science and technology.

The “No Orphan Without Education” project provides food, medicine, water and other commodities to ensure that the orphan has to worry about only his or her schooling. The foundation removes all obstacles that could impede the educational progress of involved orphans, and simply requires that the orphan is continuously attending school. All these services are provided based on need with a cost to the foundation of $10 per month for each orphan.

Impoverished students, from primary education to university levels, are able to receive support from the foundation to continue their education. The foundation is currently offering support to over 11,000 individuals. Support comes in the form of tuition fees, school supplies, housing costs etc. The foundation is able to support these students with anything from $5 to $50 a month depending on individual circumstances.

Through funds that are largely received from individual donors, hundreds of thousands of dollars are provided monthly to the Hidaya Foundation’s various humanitarian programs across Africa, Asia, and North America.

Financial support for the foundation has grown exponentially since 1999. In that year the organization fell just short of $112,000 in donations. Six years later, the foundation had raised over $4 million in support of its cause. This rapid growth has given the foundation the ability to begin hiring employees overseas and to develop teams that can respond efficiently to natural disasters when they strike.

Aamir Malik, the foundation’s IT and Advertising Director, and a long-time volunteer for the organization, commented on the rapid success of the foundation, “Donations have increased because Hidaya Foundation has been able to make an impact as it is quick to respond to calamities. Hidaya Foundation always backs up its work by updating the public about what it’s doing.”

The associates of the Hidaya Foundation are very optimistic about the future of the organization. They have confidence that the growth they have experienced will continue, and that they will be able to replicate their efforts in many more locations throughout the world.

Preston Rust

Photo: Flickr

The Dutch government has given entrepreneurs a way to do business in developing countries, without jumping through hoops to do so. The Dutch Good Growth Fund offers a source of financing for development-related businesses to improve the economies of developing countries, create jobs and increase production capacity locally.

The Dutch Good Growth Fund (DGGF) is seeking win-win situations: helping locally and fixing globally. The DGGF is divided into three subsections:

  1. Financing small to medium businesses looking to make development-related investments in low-income countries. These are companies located in the Netherlands, investing in business in other countries.
  2. Financing enterprises within low-income countries. These are small businesses in other countries that a Dutch company will support.
  3. Financing small to medium businesses wanting to export to low-income countries. These are Dutch companies exporting to other countries.

This Netherlands based loan fund is comprised of 700 million Euros from the Ministry of Foreign Affairs. Out of the total loans, 20 percent of the funding goes towards businesses in fragile states, and another 20 percent goes to women entrepreneurs.  The funding applies to 66 countries throughout the globe, all of which have emerging markets and low incomes.

The program was launched in 2014, and has yet to make any significant progress. The idea is promising—helping us while helping others—but it does not seem to be working as efficiently as the Ministry of Foreign Affairs had hoped. By targeting small businesses, the waves of success are inherently smaller.

These small waves of success, however, could amount to something big. The Dutch Good Fun Program is still only in its second year and it has already reached out to over 66 countries, helping their own local economy and boosting the morale of small business entrepreneurs. This is a program to watch out for.

Hannah Resnick

Sources: Agripro Focus, Berenschot, Centre of Research on Multinational Corporations, Government of Netherlands
Photo: GNBCC

MicrofinanceIn 2006, MIT Professor Muhammad Yunus was awarded the Nobel Prize for his work in the creation of the Grameen Bank. The Bank was created primarily to microfinance, or provide small loans, to the impoverished in Bangladesh. Today, over 97 percent of Bangladesh’s villages have a Grameen Bank presence, a whopping 7.5 million people have borrowed from the Grameen Bank and 65 percent of the borrowers “clearly improved their socio-economic conditions.” Yunus has even advocated for credit to be considered a human right because of the extent to which it can help people deal with their financial situations.

Prior to the emergence of this practice, the term “finance” largely carried the connotation of large banks, governments and corporations, and their respective handling of money or value. Liabilities, assets, savings, loans and other banking concepts can all be categorized under finance. So then, what exactly is microfinance?

Microfinance is the practice of bringing financial systems that are commonly used in the developed world, and applying these concepts on a much more personal and micro-scale. While we typically think of finance as a system that deals with large sums of money and organizations, microfinance is quite different because it deals with much smaller denominations of money and groups or individuals.

In practice, microfinance institutions or programs can differ in their specific models of operation. For example, Kiva is a microlending institution. It operates on donations, and any donor can personally become involved by browsing through testimonials and deciding whom to fund. On the other hand, the Grameen Bank no longer takes donations, and the Bank itself is actually 94 percent owned by the borrowers themselves. The majority of microfinance institutions deal primarily with microcredit, with most extending credit to women. About 97 percent of Grameen Bank’s loans are offered to women.

One point of criticism is the very high interest rates sometimes charged by various microfinance institutions; in some cases, the rate is over 50 percent. However, many argue that this is necessary to cover administrative and risk-taking costs. Defendants of the interest rates contend that participating in the loan program does not proportionately diminish the received benefits based on interest rate.

The benefits of providing financial services – often taken for granted – are unmistakably significant. The first benefit, as told by Mr. Yunus himself, is the mental and psychological stimulus a loan can give a person. The recipient of the loan becomes more independent and less inclined to feelings of marginalization. The second benefit is an increase in small businesses and economic activity in the villages. For some, small loans serve as the building blocks for small businesses. For others, the loans help pay for large goods or services like schooling, or healthcare costs, among other things. Providing small loans at affordable rates allows people to have more purchasing power than they might have otherwise, and to make purchases once considered not within their means.

An MIT study titled, “The miracle of microfinance? Evidence from a randomized evaluation,” was highly critical of the actual effects of microfinance versus the observed perceived effects before the study. Those conducting the study found that microfinance had some benefits for helping businesses increase profitability, and in increasing household income. They also found that household spending increased on durable goods, meaning goods that can be used more than once like cooking pots and mosquito nets. However, the MIT study found no significant changes in women’s empowerment, education or health. Finally, the study found that the adoption rate for microfinance was around 38 percent, indicating that many people still preferred to take out informal loans from other parties or family members.

Despite the critiques, microfinance has emerged as an innovative tool within the largely unchanging financial sector. By giving the impoverished access to financial services, the affected begin to have more opportunities and resources to turn to when dealing with personal or small business finances.

There are 2.5 billion people worldwide who are “unbanked” according to the World Bank. High costs, bureaucratic barriers and physical distance from banks facilitate this huge gap in the number of people with access to financial services and the total population. Microfinance has the potential to help bridge this gap by empowering the poor and providing them with more tools to help themselves. Although it may not be a miracle, it’s certainly better than nothing at all.

– Martin Yim

Sources: PBS, Kiva, Grameen Bank, MIT, World Bank
Photo: Flickr

En Vía, meaning “On The Path” in Spanish, is a very unique organization geared at empowering women to lead successful lives and create small businesses in the Oaxaca valley of Mexico. The owner of En Vía, Carlos Topete, founded the group when he heard about Muhammad Yunus, the Nobel Peace Prize winner in 2006. Yunus was the creator of the microloan idea, which makes it possible for people with little money to receive loans without interest.

From there, Topete’s organization blossomed. In 2008 he used his own money to form En Vía and was able to help 12 women living in poverty receive microloans; by 2011 Topete was able to reach out and help 260 other women from multiple areas of Oaxaca.

For many women, Topete’s strategy and way of running his organization are a blessing.

Guadalupe Lazo Hernandez is just one of the women En Vía has helped to get back on her feet. After her husband passed away she was struggling to stay afloat and feed her three sons with her weaving. She has received three microloans from En Vía so far, and her goal is to save up for a sewing machine so that her work is quicker, less costly and more efficient. She explains that the help from En Vía has far surpassed her expectations of just running her business, but instead she has been able to feed her children, supply them with school supplies and make their dreams possible along with hers.

Unlike other non-profits, En Vía does not just simply aim to supply women with money, clothing or food, but rather it allows them the chance to sell their products to Oaxaca travelers, gain an education and gain an understanding of how to expand their small businesses.

By charging a tour fee, Topete is able to generate more money for loans and give tourists the chance to see the advancement the women in the Oaxaca valley are making. The tourists are able to get first-hand encounters with the women and speak to them about their journeys. The tours also give visitors the opportunity to buy products to aid in the positive progression of the new lives of the En Vía women.

Topete wishes to extend and improve the entire community of Oaxaca. By involving tourists, connecting the different women involved in En Vía, and reaching out to other communities, he is laying down the foundation for a sustainable economy and giving the women resources for succeeding.

Oaxaca is a state dense with culture, history and traditions. With the help and push from En Vía, the women will be able to keep their cultures thriving by passing on what they have learned to their other family members and children. En Vía also allows the concept of micro-lending to expand outside of the Oaxaca community and reach other areas of the globe.

You can read more about Guadalupe’s experience and other women’s experiences on the En Vía blog, or watch a video from CNN of Guadalupe’s story.

– Becka Felcon

Sources: CNN, Wikispaces, En Vía, En Vía
Photo: Xica Cano

When on the search for a solution to global poverty, activists and politicians come up with various elaborate plans, incentives and government legislations. Often these solutions are built with three very simple ideas that create substantial change to those living in poverty:

1. Education

Constant and good education can change lives. While those in the developing world take it for granted, there are people who live in poverty due to their lack of education. This lack of education is normally a result of the lack of the opportunity or circumstances that require them to work rather than study. The cycle of poverty is such that living in poverty requires the next generation to work to help support the family. The younger children are rarely given a chance to complete their education. The connection between education and poverty, or rather the ability to rise out of poverty, is extremely evident. An education guarantees a job that is better paying, allowing the next generation to continue to be educated instead of working. This breaks the cycle of poverty that rears its ugly head in so many parts of the world.

2. Small Local Businesses

Opportunities for jobs increase with the support and growth of small local businesses. Local businesses don’t only create opportunities; they also bring supplies and resources into a community that would greatly benefit from it. These small businesses range from medical supplies or care facilities to agricultural and technological support. Additionally, such businesses continue to beget more businesses, making the economy flourish and the citizens of the community thrive and follow by example.

3. Technology

Technology can substantially help improve the conditions of the poor. For those working in agrarian communities, advanced technology can yield better crops; technology can help improve education. Internet access can change the face of communications, and mobile phones greatly reduce the damages of natural disasters due to the immediate news they can provide. Access to electricity or any kind of power, would also help bring amenities to those living in poverty that many people take for granted. Finally, technology will significantly improve health care standards in places where it is scarce. The Posner Center for International Development does just this: various organizations come together, come up with ideas that will benefit developing areas in the world, and help bring about these additions that will significantly improve living conditions.

– Aalekhya Malladi

Sources: NY Times, Denver Post
Photo: Foreign Policy


The International Trade Center housed within the UTSA (University of Texas at San Antonio) institute of Economic Development is partnering with USAID to train small businesses in Tunisia.  UTSA will take their Small Business Development Center (SBDC) Counselor and Director Certificate Training program to Tunisia.  The goal of the training is to help Tunisia establish SBDCs to train and support small business owners and entrepreneurs. Many of these are women and young adults with little hope of a sustainable future.

UTSA’s training program is just one component of a larger initiative focused on strengthening Tunisia’s economic development. The initiative is funded and led by USAID.  UTSA and USAID will provide the SBDC training in Tunisia, as well as stay involved with providing technical support to owners and employees of small and medium-sized enterprises.  The program will work to provide a competitive  advantage to these small business owners and work to improve  their lifestyles.

North Africa’s smallest country, Tunisia, is working to rebuild its democracy after the 2011 revolution. It is bordered by Algeria, Libya, and the Mediterranean Sea. Tunisia is ready to promote economic growth and trade opportunities with a special focus on small and medium businesses.

The International Trade Center at UTSA has grown to be one of the largest trade assistance organizations in Texas. They have been  working with countries in Central and South America.  The trade center helps companies increase their global competiveness through technical trade consulting, market research, and innovative training. Follow them on Twitter (@TexasTrade) or find them on Facebook (

– Amanda Kloeppel
Source: UTSA


The International Trade Center (ITC) is a joint agency of the World Trade Organization and the United Nations. Its mission is to build and promote businesses in developing countries, assist in becoming more competitive in global markets, speed economic development, and further the achievements of the UN’s Millennium Development Goals (MDGs). It now has more than 40 years of hands-on trade and business experience in the developing world, and a very focused approach to export-led poverty reduction. Their slogan, “Export Impact for Good.”

For ITC, the “true story of development” is the small, low-cost project that aims to give poor people “a hand to get started on the ladder of success.” After a modest level of support and funding, they are on their own path to self-sufficient living, and their success is exponential in impact for the immediate community. Three examples:
• Lifestyle products, derived from a local plant of the Eastern Cape in South Africa, are helping create jobs in one of that country’s poorer regions. Expert help from ITC, funding from an innovative public-private partnership and guaranteed commitments from overseas markets, will raise some 1,000 local people out of poverty.
• Brazilian tourist resort provides job opportunities to surrounding, impoverished areas: like a low-cost, organic waste recycling project – based on a local invention, and the sale of products made by local communities – leading to a significant rise in incomes.
• In India, rural populations are being lifted out of poverty through a program of selling locally produced spices and aromatic herbs on the international market. In just four years, exports grew seven fold and the average income increased five fold, benefiting well over 2,000 people.
The ITC article “New Jobs for Poor Communities Through Trade” gives the full story of the above projects.
– Mary Purcell

Source: ITC