P4-7. Grameen Bank has teamed with Telenor and Danone to provide telephone service and a low-priced, but nutritious yogurt. Can you think of any other goods or services that could benefit the rural poor through joint ventures between nonprofit organizations and for-profit international businesses? The lack of a well-functioning credit market is often a hindrance to rural villagers and farmers in developing countries. Living from harvest to harvest, the rural poor are vulnerable to the vagaries of the weather. When the previous harvest fails, far too often rural farmers are forced to borrow sums to plant the next crop at extortionate interest rates that keep them indebted to the money lenders.

To break this cycle of poverty, a new form of lending to the poor has emerged: microfinance. Microfinance institutions typically focus on making small loans—typically from $25 to $200—to rural entrepreneurs to begin or expand a small business. Microfinance lenders oftentimes provide other services to the rural villagers they serve, including offering savings accounts, life insurance, and basic health care