We know that poverty is not inevitable. It is a man-made phenomenon, the complex result of an unequal distribution of resources through unjust structures and systems. Poverty can be defeated but few of the solutions are simple. Many involve long-term change on a global scale.

Microfinance is one vital tool that we can put in the hands of the most marginalized communities today. Millions of people are without access to financial services as microfinance institutions currently can supply only 10% of the worldwide demand for their services.

There are so many things that can happen in poor people’s lives. Normal fluctuations that shape everyone’s daily path have a huge impact on their existence and can bring them to the verge of extreme poverty very fast.

Take for example a client whose business is running well and is on his or her way towards a better existence. An accident or an illness in the family immediately affects the business because money is needed for medicine. When giving a loan, we’re not budgeting for the broken arm of a child or a sudden flood, but for the development of the business.

A child climbs a tree and breaks his arm, a farmer gets a loan for his rice field and the nearby river floods his field: these are only a couple of the things that can go wrong in a poor person’s life that no amount of risk management can anticipate fully.