The poor cannot be trusted with credit. The consumption needs of the poor are so pressing that any loan will find its way quickly to consumption. The high repayment rate of millions of microfinance clients is empirical proof that the poor are credit-worthy. The poor are unable to save. The high rate of savings reported by many microfinance organizations demonstrates that the poor can value savings as much as credit.
Poverty has a crippling effect rendering the poor unable to improve their condition.
MicroStart is based on some 20 years experience of microfinance practitioners worldwide. Results from many countries demonstrate that very small-scale farmers, traders, and artisans living in rural and urban areas can put small loans to good use. Extending small amounts of credit, along with appropriate encouragement and orientation leads to significant increases in income, production, and employment. The best projects combine quick access to credit with skilled financial management. While there is a significant and growing number of successful organizations, many attempts have left a legacy of doomed enterprises supported by endless subsidies.