Where we are

Current financial institutions are failing many of the world's poor. Financial institutions as they have existed are meant to help maintain assets, not help create assets. Currently, banks tend to not help the poor is because of a combination of risk and the fact that they can make more money by giving out a few large loans than a number of smaller ones. Providing financial services to a few well-off people is much easier and cheaper than a huge population of poor people.

Things in many parts of the world do not function like they do in the US or Europe, and so can not be viewed in the same way. In many places, the lack of financial institutions acts as an impediment to gaining access to new ones due to a lack of credit or account history. There are also situations where assets are viewed differently and even those with a great deal of wealth lack the ability to prove that they own the buildings and land they occupy. These people should still be candidates for loans and similar things, but may not be able to acquire them from existing banking systems.

A financial industry is a bit like a pyramid, with each service building upon those below it. You can check out our pyramid below (coming soon!).

There are about a billion people who have access to financial institutions at this point. This is a great improvement in recent years, but there is still a lot of work to be done. Not only do more people need to be reached, but the sorts of institutions people have access to needs to change.

There is currently a change in microfinance from simply providing loans to entrepreneurs to providing more advanced financial services such as savings systems as well. This is necessary because we are currently addressing the fourth level of our pyramid. Loans are not useful if the money loaned is worthless by the end of the week, if there is no place to safely keep the money loaned or that received from the investment the loan was used for, or if the borrower feels the need to hoard some of that money that is loaned in case of a death or disaster.