Expanding Micro Finance with Self-Help Group Borrowers Using Local-Labor Backed Currency

Micro Finance Institutions (MFI's) have been most successful in lending to women's self-help or solidarity groups. Although MFI's do lend to individuals as well as to other groups, composed of men or including men, by far most of their lending is to self-help groups of poor women. As a result, Micro Finance doesn't reach many of the potential borrowers in poor communities, and the overall result is that improvement in living standards and reduction in poverty has not been as significant as we would like. This paper presents an example of a self-help group that can include all adults, both men and women, who live in a poor community. This self-help group functions by issuing certificates that can be redeemed for labor in a local community. Therefore the certificates become local-labor backed currency whereby labor is the medium of exchange. This can, by itself, create wealth. The members' solidarity and commitment to the group could make the group an excellent Micro Finance borrower, and hopefully improve lives and alleviate poverty