Leading the Way Out of Debt

Most insurance companies avoid insuring poor farmers because the transaction costs are too high, but a non-profit in Kenya created a sustainable way to cover them.

An innovative program by an unusual bank allows low-income people in Cambodia to take out a 15-year fixed mortgage with little or no documentation - contradicting traditional loan assumptions and creating means for some of the country's poorest people to completely change their lives. The bank and its investors are now making a profit, and more than 700 mortgages and building loans have been provided.

New Orleans implemented an extraordinary 10-year plan that engaged unprecedented cross-sector collaboration between government, non-profit, and private entities to provide housing and housing services to the city's homeless veterans. The city's success in providing homes for every single veteran formerly on their streets motivated cities across the nation to tackle the crises using similar means, leading to a 1/3 decline veteran homelessness since 2010.

Neighborhood Trust is a New York-based nonprofit offering financial advice to individuals experiencing economic hardships. Providing hands-on coaching, counselors are able to inform their clients about financial options they may have otherwise not known about like college financial aid or child care tax credits.

The militarization of police forces in cases such as Ferguson, Missouri’s riots has led the state of Utah to question what can be done to prevent such an overuse of force from happening. Utah expanded upon a law passed by Democratic legislature in Maryland, which Utah’s ACLU reworked with some libertarians, to require the police to provide data about SWAT team usage. Utah’s success demonstrates that demilitarization bills passed with bipartisan support are not impossible.

More Than Wheels, a New Hampshire-based non-profit offers an economically stable solution to the high cost of owning a car. The program offers low-cost car loans that go toward the purchase of fuel-efficient vehicles.

Throughout India, wastepickers – people who scour landfills for garbage they can sell to recyclers – live at the bottom of society. But the city of Pune did something radical: with the help of a collective, they did away with expensive garbage trucks, and now all household garbage is collected by wastepickers with pushcarts. Pune saves millions of dollars each year and recycles more – and the wastepickers have decent wages and social standing. The concept is now spreading globally.

Many offenders get out of jail owing hundreds or thousands of dollars in court and parole fees but face barriers to financing and job acquisition, sticking them in a punitive, vicious cycle of debt and arrest. A program called the Clapham Set, perhaps paired with conditional cash transfers - may be a solution, as it erases fees for felons who complete rehab and job training upon release.

The United States can outsource certain kinds of "microwork," such as accurately digitizing large swaths of information, to developing countries without taking jobs from Americans ― if it’s done carefully, and ethically, as some organizations are working to do. As the author Robert Wright has argued, we no longer live in a zero-sum world, where one person’s, or one country’s gain, must be another’s loss.

This is a column on an important new development program in use in at least 40 developing countries: give the poor cash payments, contingent on their use of health clinics and their children’s school attendance, to help break the cycle of poverty.