Universal Basic Income and Micro Finance in Africa

Sometimes, all people need is a hand up, not a handout. In Africa, many people living below the bread line want to start a small business or expand an existing [...]

Sometimes, all people need is a hand up, not a handout.

In Africa, many people living below the bread line want to start a small business or expand an existing one, but financial resources are unavailable from banks and other traditional lending institutions because of a lack of collateral.

This is the type of situation where AVA can help with Micro finance, a term used to describe financial services like micro credit, micro savings, and micro insurance that are given to disadvantaged and impoverished individuals. In practice, Micro Finance also motivates individuals with otherwise inaccessible funds that will expand his or her business options while also reducing risk.

Micro Finance consists of making small loans, of usually less than $200, to individuals to establish or expand a small, self-sustaining business. For example, a woman may borrow $200 to buy chickens so she can sell eggs. As the chickens multiply, she will have more eggs to sell, and eventually, she can sell the chickens. Each expansion pulls her further from the devastation of poverty.

We are now well and truly underway in the 21st century and everywhere world wide, people are asking for change. What is apparent as we look at the gaps between the wealthy and the impoverished, the rapid rate of technology, the small business boom and the replacement of administration by automation and outsourcing is that 20th-century solutions are no longer working for a global community.

We are living in a time where we have more wealth in society than ever before and yet poverty is still thriving. It’s 2017 and people are dying of hunger, disease and abuse, not just in Africa, but globally. It’s time for some modern motion. It’s time to get creative on abolishing poverty globally and finally, steps are being made that are actually pointing in a positive direction.

The idea is unconditional money, given freely to those who need it most. The homeless and the unemployed will be given a monthly cash amount instead of welfare. There are no strings attached, they do not need to do anything to qualify for the money and what they do with it is completely up to them. Most importantly the funds will continue even if a person finds employment. The amount is designed to cover basic expenses, food, shelter and education, nothing more. It’s unconventional, but so far, it’s been a raging success.

Experiments have been conducted in London as early as 2009, where 13 homeless men were given a lump sum from an aid organisation.

There was only one question asked of them: What do you think you need?

18 months after the experiment, all 13 men had taken critical steps toward independence and personal growth. They enrolled in classes, learned to garden or cook, put themselves through rehab and finally returned to see families. They made plans for the future. These men were selected because they were veteran ‘rough sleepers’. Some of these men had been sleeping on the streets for 40 years. One had a 20-year long addiction to heroin. Everything had been tried, forced and pushed on them without success and with the 2012 Olympics approaching, something drastic had to be done. Something drastic worked.

We want to see this working everywhere, not just 13 men in London. Fortunately, we are not alone. On the 1st of January 2017, Finland started a social experiment that will run for two years nationwide. 2,000 unemployed people aged between 25 and 58 are being given money instead of social benefits.

Like other similar experiments carried out on small scales on South American countries, Finland expects to give people increased choice that will lead to greater confidence, cutting through red tape and enabling them to pursue their passion and purpose in life. It’s life with dignity. In previous small scale experiments in poverty stricken regions, free money has meant lower infant mortality rates, less medical care expenses, higher levels of education completion, reduction in teen pregnancy, gender equality and economic growth.

The Netherlands follow suit in October this year and cities in Canada, Scotland and Italy are making moves in the same direction.

In this modern world and culture of rapid growth, every person should have the opportunity to contribute and thrive. As countries are now able to afford to secure the health and wealth of every citizen, it’s about time that the idea of a universal basic income be a universal right that means every person’s basic needs are covered, so they can reach their full potential.

Micro Finance has proven to be a successful practice and plays a major role in the development of many African nations, and is something we are now able to offer volunteers who are looking to be change makers in micro finance in Africa. Contact us to find out more.

Jess Charlotte

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