https://www.viddler.com/embed/4420d60

Economics impacts people and businesses around the world. Whether or not you are free to start and own a business, how you get financing to launch the business, and how the government supports or interferes with your business depends on what type of economic system exists in your country. In capitalist countries like the United iduals are free to start their own companies and find limited interference from the government. In communist countries like North Korea, the government either owns the business or exerts a strong hand in business operations. Globally, small businesses often drive local economies. Unfortunately, billions of people in the world make $2 a day or less. In fact, a billion people make less than $1 a day. It's not surprising, then, that aspiring entrepreneurs in developing countries have a hard time starting and growing businesses. In such places, a loan of $100 or $200 can make a huge difference in getting a business started. However, access to even such small amounts of capital is often impossible for would-be entrepreneurs to obtain. That's where microloans from organizations such as Kiva come in. Kiva is an organization founded in 2005 that provides loans to budding entrepreneurs in developing countries so they can invest in a business. Those investments often lead to community growth and employment and help the owners themselves to prosper on a moderate scale. The loans are small and referred to as microcredit or microfinancing. Kiva uses a crowdfunding approach to its microfinancing where visitors to their website can browse through pictures and profiles of people from 80 different countries around the world. When they find a business and entrepreneur they like, they can lend $25 or more to the business. Borrowers must pay back the money, and when it's repaid, lenders can withdraw the money from Kiva's system or lend it to another entrepreneur. As they become successful, entrepreneurs can borrow more and keep their business growing. Kiva crowdfunds several thousand loan requests each week. It helps over a million people in over 80 countries, giving them the opportunity to change their lives for the better. This video highlights some of those people but primarily explains how freedom and a little money can combine to create huge differences in people's lives and their country's quality of life. Kiva carefully considers several factors before it commits to lending money in a particular country. It first checks to see that the government will allow businesses to receive money and pay it back to lenders from another country. It then looks at how many microfinance institutions are already operating in the country. If the market seems too crowded or saturated, Kiva will not get involved. Finally, Kiva looks for a strong network of field partners (local nonprofit, nongovernmental enterprises) who know the community and can identify legitimate borrowers and distribute the loans to them. Kiva strongly believes lending is a better approach to helping overcome poverty than giving donations. By supporting entrepreneurs, they help grow businesses and the economy by hiring local people. In developing its mission, Kiva follows the principles set out by Adam Smith who stressed that wealth comes from freedomthe ability to keep the profits from what you do. When people try to maximize profits, they have to hire other people to help them do the work. This provides jobs for others and wealth for the entrepreneur. And, like an invisible hand, the whole community benefits from the entrepreneurs' desire to earn a profit. entrepreneurs, freedom, opportunity, and a little bit of money are to economic growth [V EILN i ol Vidco to participate in helping poor people around the world. You can do this by Kiva has shown through small loans how impo and prosperity. You are hopefully encouraged by contributing time and money to organizations like Kiva. You can join the Peace Corps or other groups designed to assist less-developed countries. Microcredit will not single-handedly solve the economic problems throughout the world, but it's a good start. THINKING IT OVER 1. Discuss why many people believe that capitalism gives entrepreneurs the best opportunity to be successful. 2. Why do people in developing countries have such a difficult time getting out of poverty? 3. Why would an entrepreneur in the United States need a microloan from Kiva