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Billion Bootstraps: Microcredit, Barefoot Bankingnd the Business Solution for Ending Poverty
A bold manifesto by two business leaders, "A Billion Bootstraps" shows why microcredit is the world's most powerful poverty-fighting movement-and an unbeatable investment for your charitable donations."A Billion Bootstraps" unearths the roots of the microcredit revolution, revealing how the pioneering work of people such as Dr. Muhammad Yunus-winner of the 2006 Nobel Peace Prize-is giving hope to billions. Philanthropist and self-made millionaire Phil Smith and microcredit expert and consultant Eric Thurman provide a riveting narrative that explores how these small loans, arranged by barefoot bankers, enable impoverished people to start small businesses, support their families, and improve local economies. By paying back their loans instead of simply accepting handouts, men and women around the world are continually giving others the same opportunity to change their futures.Smith and Thurman also examine why traditional charity programs, while providing short-term relief, often perpetuate the problems they are trying to alleviate, and how applying investment principles to philanthropy is the key to reversing poverty permanently."A Billion Bootstraps" explains how ordinary people can accelerate the microcredit movement by investing charitable donations in specific programs and then leveraging those contributions so the net cost to lift one person out of poverty is remarkably low. You'll discover how to get more for your money by donating with the mind-set of an investor and calculating measurable returns-returns that will change lives and societies forever.
224 pages, ebook
First published February 7, 2007
15 people are currently reading
223 people want to read
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Displaying 1 - 19 of 19 reviews
June 29, 2009
Trillions of dollars in handout aid in the 20th century to the developing world has failed miserably in the 20th century. One recently popular solution that promises to change this dismal record is microcredit. Many will have heard about microcredit before, Smith and Thurman craft a very straight-forward non-jargon manual on microcredit. They tell many stories of many lives improved by microcredit.
In the appendix section, the authors demonstrate a pretty simple calculation of cost per lives impacted (CPL).
Importantly, this formula has a multiplier in the denominator for how many times the microloan is reloaned. This is the reason why microcredit can have a much larger and much more sustainable effect on solving poverty than traditional forms of aid. More specifically, taking into account calculation criticisms of some banking experts, the authors hypothetically come up with a CPL for microlending of 6% of the avg income of a developing world.
Taking numbers from: http://defeatpoverty.com/reading/2008...
"In the Democratic Republic of Congo, the average income is $120, so the CPL would be 1-10% of that or $1.20 to $12. Wow! It is an order of magnitude (10x) more expensive in middle income countries (e.g. Eastern Europe) and two orders of magnitude (100x) more expensive in developed countries. So, if you are looking for maximizing your CPL...low income countries are the best investment by far."
One important point the authors made is that making microloans in developing countries is many times more impactful because a $10 income change means a lot more than it does in the United States. In Muhammed Yunus's book Banker to the Poor, he argued that microcredit would work in poor areas of the United States as well as it has in Bangladesh and other developing regions. However, this did not seem logical at all. If I loaned $100 to an unemployed person, no matter how entrepreneurial, that money would not go as far. Though exceptions are many, the costs of entry for businesses to enter a market in developed nations are much higher than can be financed by microloans. Thus, I appreciated that Smith and Thurman made this distinction.
One glaring issue not addressed in the authors' whole-hearted recommendation of microloans as the solution for poverty is that access to capital is only one contributor to destitution. The authors appreciate that many other social-political factors play a role, but insist that microcredit is a "broad spectrum antibiotic" that can address all the problems. But what about the HIV epidemic in sub-Saharan Africa? What about the need for anti-RV drugs in Haiti? Raising the incomes of many individuals can still not make up for the lack of a medical and educational infrastructure. I believe certain aid still needs to remain as a charity, such as medicines, supplies, construction of schools.
Overall, the book is a well-written, good practical overview of microcredit and why it holds the promise of dramatically reducing the number of people in the world in extreme poverty.
In the appendix section, the authors demonstrate a pretty simple calculation of cost per lives impacted (CPL).
Importantly, this formula has a multiplier in the denominator for how many times the microloan is reloaned. This is the reason why microcredit can have a much larger and much more sustainable effect on solving poverty than traditional forms of aid. More specifically, taking into account calculation criticisms of some banking experts, the authors hypothetically come up with a CPL for microlending of 6% of the avg income of a developing world.
Taking numbers from: http://defeatpoverty.com/reading/2008...
"In the Democratic Republic of Congo, the average income is $120, so the CPL would be 1-10% of that or $1.20 to $12. Wow! It is an order of magnitude (10x) more expensive in middle income countries (e.g. Eastern Europe) and two orders of magnitude (100x) more expensive in developed countries. So, if you are looking for maximizing your CPL...low income countries are the best investment by far."
One important point the authors made is that making microloans in developing countries is many times more impactful because a $10 income change means a lot more than it does in the United States. In Muhammed Yunus's book Banker to the Poor, he argued that microcredit would work in poor areas of the United States as well as it has in Bangladesh and other developing regions. However, this did not seem logical at all. If I loaned $100 to an unemployed person, no matter how entrepreneurial, that money would not go as far. Though exceptions are many, the costs of entry for businesses to enter a market in developed nations are much higher than can be financed by microloans. Thus, I appreciated that Smith and Thurman made this distinction.
One glaring issue not addressed in the authors' whole-hearted recommendation of microloans as the solution for poverty is that access to capital is only one contributor to destitution. The authors appreciate that many other social-political factors play a role, but insist that microcredit is a "broad spectrum antibiotic" that can address all the problems. But what about the HIV epidemic in sub-Saharan Africa? What about the need for anti-RV drugs in Haiti? Raising the incomes of many individuals can still not make up for the lack of a medical and educational infrastructure. I believe certain aid still needs to remain as a charity, such as medicines, supplies, construction of schools.
Overall, the book is a well-written, good practical overview of microcredit and why it holds the promise of dramatically reducing the number of people in the world in extreme poverty.
November 7, 2007
The authors present a business person's introduction to microcredit and outline reasons why this form of aid is one of the most successful ways to fight poverty. Although I already understood some basics of microcredit loans, the book gave me more background and history of the microfinance movement. The authors seemed to write for a affluent audience looking for ways to enter into philanthropy, rather than for a broader audience including those with more modest incomes. This surprised me because, "the smaller the loan, the bigger the impact." Still, with the upcoming holidays sparking the spirit of giving, this book is a wonderful place to begin researching where and how to donate.
September 8, 2016
Economic uplift without institutions.
This book is not well written but its ideas are why I gave it five stars.
A reasoned argument to encourage support for poor folks through small loans made locally by local organizations. Sort of building infrastructure of a nation from the ground up rather than by World Bank financed mega-projects. For me, it seems an inspirational and pragmatic approach to directly helping others without complications. A lot of current internet funding agencies seem derivative of this model.
This book is not well written but its ideas are why I gave it five stars.
A reasoned argument to encourage support for poor folks through small loans made locally by local organizations. Sort of building infrastructure of a nation from the ground up rather than by World Bank financed mega-projects. For me, it seems an inspirational and pragmatic approach to directly helping others without complications. A lot of current internet funding agencies seem derivative of this model.
June 9, 2009
This book is a really good starting place for anyone with a desire to learn more about the increasing popularity of microfinance. Smith stresses the importance of demanding a big return on your charitable donations (he uses the formula "cost-per-life"), as you would on money in your investment portfolio. I like this book much more than Yunus' "Banker to the Poor" as a primer to learning about microfinance.
December 27, 2011
Though a bit fluffy, the argument put forth by Thurman and Smith that philanthropy should be viewed as a social investment with expected returns just like business investments is a idea worth spreading amongst both individual and corporate donors. Due diligence and not guilt should drive how donors choose whom to support. An easy read written as interwoven personal reflections on microcredit.
Currently reading
January 9, 2008wow - very interesting so far. Amazing how microcredit is changing economies. I've seen it in action in Cambodia (even been a part of it by helping to purchase a cow there). Heavy on philanthropy strategy, but I'll let you know how it finishes up.
October 6, 2008
The recent Novel peace price to Grameen Bank has brought the Micro credit to limelight. This book talks about the basics and also gives umpteen note by the authors in their effort towards philanthropy through Microcredit.
July 16, 2013
Much better than Yunus' book Building Social Business, but it may not be a fair comparison since Yunus' book is a part 3 in a 3-part series. Smith lays out an easy to follow reasoning for why microcredit works and how to get started in microcredit. The writing was also much better than Yunus'.
This entire review has been hidden because of spoilers.
Want to read
August 9, 2007recommended by a family member
December 10, 2007
A good intro book on microfinance - explains well how microfinance works, why it works and what you can do to be part of it.
January 14, 2008
Well it does not come highly recommended. I wanted to know more about microcredit and how it works and why so many people are getting behind it. But this book was simple fluff.
April 2, 2008
This is a book about missions through microfinance. Still reading it...
September 16, 2008
An incredible book which unfolds an actual solution to eradicating poverty. A must read for all.
November 19, 2008
Minutely interesting
February 14, 2009
Well written and a great intro to the powerful tool of microcredit in developing nations. I'm a definite believer.
April 11, 2014
Microcredit is not the panacea everyone seems to think it is. If you read this book and believe it is a solution read something by Bateman or Hugh Sinclair to get the other side of the picture.
August 2, 2011
A good introduction to the concept of microfinance and the power of business in reducing poverty. But if you are looking for something more in depth and complex I would recommend Yunas.
January 3, 2008
to make sure that our investments are not a black hole, but are effective.
April 22, 2014
Good book on how to invest as a means of countering poverty.
Displaying 1 - 19 of 19 reviews