Micro-Finance Philanthropy and Financial Advisors

If you’re looking for new and exciting ways to engage in philanthropic causes, there are some worthwhile opportunities to review in the specialized world of micro-financing—a way to fuel very small businesses in impoverished regions in order to relieve extreme poverty. Let’s take a quick look at some of the recent developments in micro-finance philanthropy.

Micro-finance is an over-arching term, generally, for tech-assisted ways to deliver small but meaningful amounts of money to poor, entrepreneurial men and women that can help lift them out of poverty. What had begun as small-scale, innovative works in philanthropy became a potential cure-all for systemic poverty. The reasons for this are disarmingly simple, as elucidated recently by former UN Secretary General Kofi Annan:

“Micro-finance recognizes that poor people are remarkable reservoirs of energy and knowledge. And while the lack of financial services is a sign of poverty, today it is also understood as an untapped opportunity to create markets, bring people in from the margins and give them the tools with which to help themselves.”

That positive analysis is certainly helpful, but the role played by technology is transformative. Until the recent surge in smartphones and secure links to financial services, the process of micro-loan-writing had been beset by many of very same ills–instability, poor record-keeping, and corruption–that made philanthropy necessary in the first place. Now, with direct, individualized access (by potential micro-loan recipients) to bank accounts and the internet, those barriers may be disappearing.

By attracting outside business investment in the creation of new markets (while simultaneously empowering entrepreneurs and individuals with basic financial tools), the very foundations of systemic poverty might now be addressed. To be sure, micro-loans have their detractors—some say that not all programs are created equal, and that it can be difficult to track the success of any particular program.

That said, micro-finance programs represent significant opportunities for philanthropists who want to make a mark; and of course financial advisors are as well-positioned as any to take part in this particular flavor of philanthropy.

For years, the rallying cry of the globalist has been characterized by support for fair business practices, rule of law, effective policing, improved infrastructure, and greater social capital as a means to dramatically improve fortunes both big and small across the globe. Micro-finance is essentially that ethos in microcosm–an attempt at effectively igniting many small sparkplugs (in targeted, impoverished economies) to drive the larger economic engine.

All of the above only goes to suggest the additional power that financial advisors can add to this particular type of philanthropy—even where it means finding those programs that most conform to standard. For when Financial Advisors take their knowledge of financial instruments, risk assessment, financial planning, and accounting, and apply it to this new and exciting field, the results can be truly meaningful.

Financial advisors are deeply aware of the importance of the relationships they build with their clients; understanding the faces and the names of the people who will be affected by their advisory. It is this focus on an individual approach to finance that makes a financial advisor uniquely qualified to engage in micro-finance philanthropy.

Here are just a few ways that financial advisors can engage in or find out more about micro-finance philanthropy:

Opportunity International
Inside Philanthropy: Inclusion Grants

Financial advisors can contribute via their ability to successfully navigate and manage the complexities of finance, while at the same time deploying some of their other core values—those rooted in the way they hope to individualize finance for greatest impact. Where it works, micro-finance can be truly impactful; financial advisors can play a significant role in implementing and improving it.