Wednesday, January 6, 2010

Microjobs

"Even if microlending isn't a clear-cut pathway out of poverty--and years of studies have yet to settle that debate--it could still be doing something useful."

Barbara Kiviat, "Can Microfinance Make It In America?" Time, January 11, 2010.

I think it's a sign of the times--recession and job loss-- that all sorts of ideas are getting more visibility. Self employment and microlending, for example, are in the news -- even a recent Parade Magazine included a column about a prominent microlender.

There are the big issues about microlending like reducing poverty alleviation and the financial self sufficiency of the lending model. I've come to recognize the importance of self-employment as an income patching or supplementing tool -- frequently for people who already have a business and may face obstacles in moving up the skills ladder in the labor market because of language and literacy barriers.

"More often than not...the borrowers...already have jobs (as factory workers or home health aides, for example) as well as side businesses--selling toys or Amway products, cleaning houses or giving haircuts."

Another approach is to crack down on the payday lenders and other alternative lenders to make sure fair and affordable credit is available.

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