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Extra Aqua Vitae Nulla Salus

5.05.2005

Micro Loans, Solid Returns

With about $200 of his own money and a $1,500 loan, Vahid Hujdur rented space in the old section of Sarajevo and started repairing, then reselling discarded industrial sewing machines. Eight years and several loans later, Hujdur now has 10 employees building, installing, and fixing industrial machinery. Hujdur didn't get his initial loan from a local bank. "They were asking for guarantees that were impossible to get," he recalls. Instead, the capital came from LOKmicro, a local financial institution specializing in microfinance - the lending of small amounts to the poor in developing nations to help them launch small enterprises.
This is a good idea. It works in Bangladesh. It works in Bosnia. Goes to show that self-righteous bureaucracy through coercive taxing is neither the proper dao for the environmentalist nor philanthropist. It's capitalism.

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