Microfinance is a buzz word.

And yet, microfinance has not yet had the effect for which people hoped. Some of the world’s poor have been able to access loans through organizations like BRAC. For many, though, microfinance is still just a word and not an active action.

Ask anyone over here what their biggest need is and they will most likely respond, “Money.” I follow up by asking if they’ve ever considered microfinance. They respond yes. And the conversation ends there.

People know about microfinance, but the majority rarely takes advantage of it. Perhaps bank interest rates are still too high. Perhaps the infrastructure doesn’t exist or have the capacity. Perhaps there is cultural resistance. Whatever the reason, microfinance is, in reality, not the dream solution that everyone hoped.

But that doesn’t mean the concept of micro-something can’t be modified to have the desired effect. According to The Economist, two new micro-somethings – microsavings and microinsurance – were recently piloted, and both have yielded positive results. They expand upon the concept of microfinance, tying in a very key technology: the mobile phone.

Microfinance alone may not provide the desired results yet, but micro-somethings still have potential.

(Photo from The Economist.)