OpenIDEO is an open innovation platform. Join our global community to solve big challenges for social good. Sign Up / Login or Learn more

Alternative ways for financial empowerment

What about less conventional ways to financially empower communities? At the end of the day it is about making communities self-sufficient.

Photo of Karine Sarkissian
9 7

Written by

  • Micro-financing is a concept created by Muhammad Yunus. It was implemented through his organization, Grameen Bank. It consists of lending money to entrepreneurs and small businesses lacking access to banking and other such services.

However, having studied various cases, often at times, the micro-financing system creates problems with its clients, as people get carried away and end up being more indebted then when they initially asked for the loan.

How can we insure that the loans be beneficial to the users? How can we insure they are made use of correctly? Education and awareness seem key.


What about people lending money to one another- rather than larger institutions?

There exist organizations such as the Lending Club ( A system created between Borrowers and Investors.

The lending club is an online platform that acts as a peer to peer credit marketplace, where individuals can lend/borrow from other individuals. To put it in other words, it is a place where individuals can use their savings to provide financing to people who need a loan (for many different reasons) but couldn’t otherwise obtain it from a bank.

In a first instance, an individual would make an application for a loan in the Lending Club website. After being reviewed and accepted (could be declined as well), each loan gets assigned a risk factor and appears in the marketplace for potential lenders to evaluate. Once in the market place, each lender (who also has gone through an approval process before being accepted) can make an offer for a loan.

Let’s use an example where A has been accepted to apply for a $100 loan, and B, C, and D are people looking to lend money in the marketplace. B, C and D all see A’s loan opportunity and are interested, so they all make an offer. B wants to give A $100, however, C only wants to give A $50, and D also only wants to give A $50.

In this case, A can choose to get the full $100 from B,or he can also choose to accept C and D’s offers (which combined give $100).

This system encourages a trust to be created between the investors and the borrower. Does the lending club appeal to ‘those who need it most’? It seems to be focused on the individual (the borrower)- How can we encourage the community aspect within this challenge?


Heifer International (

What if it’s not only about donating the money, but rather giving communities initiative to grow, prosper, and become self-sufficient?

Heifer International  gives people opportunities to become self-sufficient. By providing cattle to communities and teaching them how to make use of those resources, they encourage them to be strong and survive on their own. It encourages collaboration and enhances trust within communities.

Further question to ask ourselves:



Join the conversation:

Photo of Trevor z Hallstein

Hi Karine. You mention Microlending and Lending Clubs as possible tools. I was wondering if you have any experience with microinsurance and how well it helps the insured? I posted a brief research note on it to see if anyone in the community has some anecdotes to share:

Photo of Karine Sarkissian

Hi Trevor,

You bring up a very valid question. I don't really have experience with micro-insurance- however I've been reaching out to a micro-financing company in Beirut, Lebanon. I will try and get some answers and ask many more questions about obstacles in general. I will let you know what I find out!

Photo of Trevor z Hallstein


Photo of Meena Kadri

I'm loving your provocations here, Karine! I think that negative issues underlying microfinance are often swept under the carpet or drowned out by the slick communications put out by microfinance providers themselves. (I also think that minor-savings doesn't get the attention it deserves – based on my observations in India:

You've really hit it on the head for me with asking how we might encourage self sufficiency without imposing our set methods.

We thought you might be interested to join in conversations like this which are highlighting or building upon nuanced local perspectives:
and also this one which has formalised an informal process which exists in grassroots communities all over the world (ROSCAs):

We're amped to have you onboard for this challenge and hope to see more of you across conversations on OpenIDEO.

Photo of Karine Sarkissian

Thank you Meena! I'm so glad my points came across. I will definitely check out the posts.

Photo of Joe Silva

Karine, you’ve brought up good points and have asked some great questions.

Re: “how can we ensure (loans) are made use of correctly?”

This is an interesting perspective. You insinuate that “we” understand what is best for a community/user. I don’t believe we do. Our job is to listen to and observe community members to establish a foundation for an honest collaboration; where our strategies and skills meet their reality. Instead of focusing on how we make sure they do what we say- let’s pivot towards ‘how can we ensure we don’t impose our external beliefs on their way of life’.

Re: “what if it’s not only about donating money…?”

It’s definitely not only about donating money. It’s more about teaching a man to fish. This reminds me of the tragic history of “Play Pumps” (

Long story short- a social entrepreneur began marketing a pump that allowed school children to draw water from the community’s well simply by spinning on a merry-go-round. At first the pumps were working, the water was flowing and the company seemed to be destined for sustainable success. They quickly expanded across Africa (funding came from advertisements placed on the tanks that filled up while the kids played). But when the pumps began to breakdown (most became inoperable), the communities were right back where they started. Repairs rarely happened and sometimes not at all.

For me the biggest lesson was that the company didn’t recognize that Play Pumps’ failure was an opportunity to provide more than water. They could have intervened again, and invested money (they were backed by $15 million from the Clinton and Case Foundations) in reassessing how to teach staff at the local schools (who hosted the pumps) how to make the repairs themselves.

I feel like we’re pretty close to being on the same page. You should check out my post:

- Joe

Photo of Karine Sarkissian

Hi Joe. Thank you for your comment and sharing that story- i absolutely agree with you. I definitely think it is key to follow up with any proposed project. However, the job shouldn't really be ours- in creating a self-sustainable community, it is essential that they know how to take care of themselves once the external help (if needed) has been provided. It's all about teaching a man to fish!

Photo of Polly Smith

Thanks for sharing this - love Heifer, great angle here.

Photo of OpenIDEO

Congrats on this post being today's Featured Contribution!