Efforts to raise the standard of living in Africa is certainly not a new thing. There are a number of hurdles that arise from these valiant efforts, but things are changing. The internet is going to have an enormous impact on what happens in Africa over the next generation. One thing that I believe has the potential for enormous impact is Microloaning. Small donations by people in the world to poor rural nations are going to put money in the hands of people that can make the biggest changes to infrastructure. Traditional loaning to developing nations would go something like this…
World Bank gives the country several million dollars to put in a power plant (or other theoretically awesome thing)
None of the infrastructure is in place to take advantage of the power produced
The country can’t afford resources needed to power the power plant anyway because of fierce competition by industrial countries
Country prints vast sums of money to pay off World Bank, tanking the value of their currency
Rinse, Wash, Repeat.
Microloaning works more like this…
Farmer needs money to by a water pump to better irrigate his crops
Several people loan him the money he needs to buy a water pump
Farmer has higher yields on his farm, and is more immune to potential drought and has more crops to sell and export
He can use the extra money to pay down his debt and start investing in his farm
Developing countries don’t need any one big change, they need millions of small ones.
The internet is going to change everything.