Posts Tagged ‘Microfinance’

Microschools – Opportunity International’s Contribution for Achieving MDG 2

Microschools of Opportunity™

The United Nation’s Millennium Development Goals (MDG’s), established at the Millennium Summit in 2000, consist of eight goals related to international development topics such as poverty eradication (#1), promotion of gender equality (#3), global health issues (#6), or environmental sustainability (#7), and to which all UN member states have agreed to accomplish by 2015.

MDG #2—to achieve universal primary education—addresses the importance of literacy for advancing human development and tackling extreme poverty. Nobel Peace Laureate and former UN Secretary-General Kofi Annan, in the foreword of UNICEF’s 1999 “The State of the World’s Children” report, refers to education as “a human right with immense power to transform. On its foundation rest the cornerstones of freedom, democracy and sustainable human development.”

But although considerable progress has been made with respect to MDG #2 since the year 2000, there’s still a long way to go. In Sub-Saharan Africa, for example, around 38 million children of primary school age are still not enrolled in any kind of primary education. In developing countries, the cost for education consumes an enormous amount of a poor family’s income, if it sends its children to school at all. Although public schools often don’t charge tuition fees, sending the children there nevertheless involves other indirect costs such as textbook fees or costs for compulsory uniforms. Further, the school might not be in the immediate neighbourhood of the families, resulting in additional expenses for transportation. At the end, all these indirect costs keep school children out of the classrooms. Microschools run by “social edupreneurs” are therefore a viable alternative to public educational systems.

Opportunity International, a leading non-profit organization founded in 1971 as one of the first microcredit lenders and committed to solving global poverty, is also a pioneer in the area of microschools. In 2007, it launched its Microschools of Opportunity™ program that provides loans to teachers who open schools in poor neighborhoods where children, especially girls, would otherwise be unable to access public education. And that’s also where the name comes from—it refers to the fact that the schools are financed through microcredits, rather than to the actual size of the schools. Read more…


Microfinance as an Instrument for Conflict Prevention?

March 31, 2010 7 comments

Image by Antonio Olmos / HelpAge International (found on

Microfinance is nowadays widely recognized as a powerful tool for combating global poverty by giving micro-entrepreneurs access to small loans and other financial services to which they usually would not have access. Investing in grassroots efforts like microfinancial services unfolds an invaluable potential of innovation and empowers the people at the bottom of the pyramid to work out of chronic poverty and to sustainably transform their and their families’ lives. Poverty often is the result of violent conflicts, which disrupt economic activity, severely impact social and political structures, and deteriorate the quality of life of civilians. As such, microfinance can also be considered an effective instrument for post-conflict reconstruction. Extensive research has been done on these topics, and there is a huge variety of literature.

However, there’s an area which I regard as interesting but where I have not found much information, namely whether there is a potential for microfinance as a conflict prevention instrument. This is obviously a hard question to answer, since it is difficult to analyze whether specific pre-conflict settings would actually have led to a conflict situation, had there not been microfinancial activities. Further, in order to analyze this question in more detail, many aspects would have to be considered, such as the type of the potential conflict (i.e. is it likely to be an ethnic conflict, a “social grievance” conflict, etc.) or the risks for microfinance institutions (MFI’s) to operate in such pre-conflict environments. For the purpose of this post, however, I will concentrate on some brief reflections on a rather general level, i.e. looking at the economic causes of civil conflict as defined by Paul Collier[1], and how microfinance could potentially address these issues before the violent conflict breaks out. Read more…