How Micro Loans Can Help Those in Need  

Those who are unfortunate enough to be born into poverty more often than not fail to escape their plight, a lack of opportunities to improve their lives means that for millions, there is little hope of change. Thankfully for millions more there are some incredible charities and organizations who are working tirelessly to help lift the World’s most unfortunate out of their situations and on to better lives. There are varying different types of charities, there are reactive charities who offer medical care, provide food and supplies for the poor and there are proactive charities, those who offer education and projects that give people the chance to take themselves out of poverty. One such organization that is looking to give people a hand up as opposed to giving hand outs is The Mercy Foundation who offer micro-loans to thousands of people across the third world.

The Organization

Joe Johnson Mercy Foundation founder and CEO created the organization in 2009 with the aim of helping some of the poorest in the World to help themselves through offering small loans. Johnson is a successful businessman who has forged a career in commercial real estate and is CEO of The Welfont Group, a real estate brokerage firm. His vision for creating funds for his organization was through the use of what the IRS calls a 170 transaction. A 170 purchase is the act of selling property to a non-profit organization, doing so means that the seller can deduct the tax on profit made on the sale. This encourages people who have property which isn’t being used, to sell and the organization then sells the property on again and uses the profits to fund its project.

How Micro Loans Help

The idea behind the micro loan is to provide those across all 6 continents with an opportunity that they otherwise wouldn’t have had,The Mercy Foundation provides loans of between $400-500 in order to help people invest in education or in the creation or the running of their own business. The loans offered by the foundation help people to avoid loaning money that comes with sky-high interest rates and in doing so puts less pressure on the repayment which gives people the freedom to improve their lives.

Of the 9,000 loans that have been given out so far by the organization, the repayment rate is 99%, this not only indicates that the people who have borrowed the money have been successful in their endeavors to improve but also means that the money that is being paid back can go on to provide thousands more with loans. From Georgian farmers looking to double their production to Ugandan women training as midwives, the micro loan system allows people across the World to pay their own way when it comes to improving their chances in life.

The Mercy Foundation has only been in operation for 7 years an already owns around 4 million square feet of property that it is looking to sell. With the repayment rate as high as it is and with the level of property that it is buying and selling, this organization will continue to grow and help to provide thousands more with the chance to better their lives, on their own terms.