Right now, at least 1.4 billion people on this planet live on less than $1.25 USD per day. (Source: World Bank) These are people that live in what is called “extreme poverty.” At that level of income, people don’t have access to adequate shelter, food, clean water, education, or health care.

Think about that for a second.

Being born on Earth means that you have a 20% chance of living a miserable, malnourished, hopeless existence. If you’re reading this post, you got very, very lucky in the lottery of life.

One of the most debilitating consequences of extreme poverty is the complete lack of resources available to the poor to improve their conditions in life. In most countries education is not free, so the very poor can’t participate. Health care is either expensive or not available at all, so diseases like malaria and pneumonia that can be easily treated in the developed world kill millions every year. And until very recently, the very poor had no access to credit to begin businesses and other income generating activities.

The good news is that we have answers to nearly all of these problems now. Do we have the will to implement them?

Grameen Bank Changes Our Perceptions

Several years ago, I heard about this crazy bank in Bangladesh that was lending out as little as $1 USD to extremely poor people. Even crazier, they weren’t requiring any collateral or contract for these loans. Crazier still, their default rate was lower than most banks in the U.S.

Conventional wisdom suggests that people are poor because they lack education, ambition, or the knowledge to produce enough income to help themselves. Lending money to a very poor person must surely be a losing proposition because they will never be able to repay it. Muhammad Yunus, formerly a U.S. trained economics professor, decided to challenge that conventional wisdom. He believed that with access to credit, the poor would create businesses that generate incomes for themselves and their families.

The bank that he founded, Grameen Bank, has been one of the biggest success stories in improving the lives of the poor in the last 25 years. It even won the Nobel Peace Prize in 2006. Ninety-seven percent of all of its borrowers have been women, who traditionally lack access to credit and property ownership. The bank has even begun a micro-micro lending program of less than $1 for beggars (their word, not mine), encouraging them to begin selling very low cost items to supplement their begging income.

Why is this important?

Helping people increase their income from $1.25 USD to even the paltry sum of $2 USD creates tremendous opportunities for them and their families. At that level of income, people in the developing world can gain access to a basic but nutritious diet, very simple shelter, preventative medicine like mosquito nets, and most importantly, education for themselves and their children. Grameen not only lends money, it encourages its borrowers to make the 16 Decisions including deciding to educate their children with their increased income. As the children of Grameen borrowers gain education, they will be better able to support themselves and their families in the next generation. Grameen hopes that its lending programs will act like a pebble thrown into a pond, and the ripples will spread widely for many generations to come.

Microlending for Everyone

So, why should you care about a bank in Bangladesh?

Grameen’s bold actions provided an important proof of concept: The very poor want to help themselves. When given access to resources similar to what we can access in the West, they do help themselves. They start business, create jobs and income, help their families, and repay their debts.

Moreover, because Grameen has been so successful, many other microlending programs and banks have been started throughout the world. There are microlending banks, programs through the World Bank, foundation-funding microlending programs, and even microlending in poor communities in the U.S. Then, in 2005, two really smart people from Stanford founded a little organization called Kiva.

If you care at all about ending poverty, Kiva is just about the damn coolest thing since the polio vaccine.

Through the magic of the internet, and extensive partnerships throughout the developing world, you (yes YOU) can put as little as $25 into an account at Kiva’s site, look at all of the prospective borrowers, and loan them some money. After a while they repay your money and you can loan it to someone else. I’ve been on Kiva for about a year now and so far I’ve loaned money to a woman to buy inventory for her clothing making business and to a man to make repairs to his taxi. I’m continuing to recycle the money I’ve put into the system, which is great. Without any further investment from me, the people that I’m lending to are able to expand their businesses and create more opportunities for themselves and their families.

Do Something. Now!

You know what? No one wants to be poor. No one asks to be poor. No one deserves to be poor. NO ONE needs to live on less than $1.25 USD a day in this world. It’s ridiculous.

You can’t single-handedly end global poverty, but there are many, many things you can do to make one person’s life better, right now. Here are just a few ideas:

• Sign up for Kiva. You can open an account with $25. Lend the money out, get it back, and lend it again. It’s the hardest working donation you’ll ever make. (While you’re there, consider donating $5 or $10 to Kiva for their operating expenses. Charities have to pay the electric bill, too!)
• Read about the United Nation’s Millennium Development Goals. The United Nations has laid out ambitious goals to end or seriously reduce extreme poverty by 2015. The 2008 progress report shows that there has been progress, but there is much left undone.
• Stand Up against poverty this weekend. In partnership with the U.N., millions of people are taking action this weekend to improve the lives of the very poor. Here is a map of events in the U.S. Find one and take action.
• Donate to your favorite relief charity. If there isn’t a natural or man-made disaster to clean up from right now, there will be soon. Help your favorite relief charity be there providing much needed services during the next tsunami, earth quake, or fire.

Today is October 15, 2008. What have you done today to end poverty?

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