Thursday, July 2, 2009

How to Become a Microfinance Millionaire?

Given that they had become a necessity during the austere fiscal environment of our post credit crisis economy, but can one become a micro finance millionaire?

By: Vanessa Uy

As 500 US dollars worth of my trust fund has been invested in our local micro finance provider for the past 4 years, the biannual dividends serve as the source of my movie going budget. Though there’s plenty left for other stuff like legendary High-End audio gear being sold at a local garage sale at scrap-value price. But what would happen if I reinvested that money I haven’t spent in another microfinance provider? Could I become a millionaire before I turn 30?

By the nature of the beast, microfinance loans are high in interest – even though the amount of money being lent is usually 500 US dollars or less. This is necessary because there is a need to cover the cost of the service provided – not to mention the wages of the microfinance company’s staff - plus the dividends of the investor. Given that the profit margins in a typical microfinance provider is already as low as it can get, is it still possible to become rich from microfinance? Or is micro finance just an oxymoron – i.e. two words combined that don’t make sense?

Though you can’t deny the sense of satisfaction of helping your fellow human being with the ease and investment returns of being a microfinance investor, the current economic downturn – for better or for worse – had been very helpful to our local microfinance / microcredit loans provider. Laid-off construction workers from Japan and Singapore had been arriving in droves and applying micro finance loans in order to make a living from their “ancestral wisdom” – i.e. fishing and the organic farming of medicinal herbs. And since our local fish sanctuary was made possible by profits made from our local micro finance scheme, former construction workers with fishing skills will find gainful employment given the fish stock security has been assured. Investing in microfinance programs might be a strange way to make a living, but it is still possible to get rich from it, at the same time being able to help the needy.


  1. Microfinance / microcredit schemes are inherently "liar-loan" proof because most prospective clients usually live within comfortable walking distance from the local microcredit loan office - i.e. client and loan issuer knew each other. Unlike American banks that instigated the credit crunch who were primarily driven by financial greed when they issued their subprime loans and mortgages to unwary applicants.

  2. Finally, an economically-viable way to earn money from one's own ancestral wisdom. If this succeeds, then tribal / pastoral / first-nation citizens around the world will - hopefully - be the primary beneficiaries of the Muhammad Yunus-inspired microcredit / microfinance loans - corporate social responsibility par excellence indeed.