Microfinance The new economic landscape that has been formed by recent history and events, has demonstrated to the world that new approaches and methods are not only acceptable, but in many cases, mandatory. The rise of the individual, and his ability to live life with liberty while pursuing happiness, has forced the way business and banking has practiced to essentially change and rethink their role in society and the economy.

Two important trends have surfaced in recent times that demonstrates the power of combining new ideas together to form something stronger than the sum of their parts. Micro-financing, has developed as a new way to help keep upward mobility a viable practice by allowing those who would not normally be able to take advantage of a good idea and capitalize on it by providing unique sources of lending for these entrepreneurs. Big data, and the use of information to help guide markets and business systems has risen in popularity concurrently with the practice of micro-financing an micro-lending, aiding in it ability to be an effective and efficient means of economic practice.

The purpose of this essay is to highlight and contextualize the use of big data and its incorporation into micro-financing to demonstrate the practicality and benefit of its use in business practices. The essay will first define key terms and definitions before describing the overall successes of the micro-financing process and the new social trends that accompany such a practice. The essay will then describe how big data and the artful manipulation of this information has been of integral importance to the development of this practice. Before the essay concludes, it will discuss some of the problems and failures that have also occurred and ways that the system can improve upon itself.

What is Micro-Finance?

According to Investopedia, micro-finance is "a type of banking service that is provided to unemployed or low-income individuals or groups who would otherwise have no other means of gaining financial services. Ultimately, the goal of microfinance is to give low income people an opportunity to become self-sufficient by providing a means of saving money, borrowing money and insurance." The aims of this practice are philanthropic in nature as most of the requesters of these types of services are not real competitive threats to the big business and banking industries.

Microfinance Institutions (MFIs) provide these services to those in search in improving their destitute and impoverished lives through the borrowing of money from others. This practice has been going on for nearly 40 years in one form or another and has become very popular in today's society. The goals of this practice transcend normal economics and looks to spread equality in access to important resources such as credit and capital. Micro finance is about saving the world from the depths of a non-commercial environment where competition is needed to help produce the next generation and teach it to survive.

According to the Consultative Group to Assist the Poor (CGAP), real and specific information is difficult to find about their clients. The wrote "Hard data on the poverty status of clients is limited, but tends to suggest that most microfinance clients fall near the poverty line, both above and below. Households in the poorest 10% of the population, including the destitute, are not traditional microcredit clients because they lack stable cash flows to repay loans." The true market for these types of loans is essentially unknown since there are many poor people throughout the world looking to escape their situation through the use of innovation and entrepreneurship.

Those wishing to receive this type of loan seek out a MFI. MFIs are typically non-governmental organizations, credit unions, state owned banks and federal assistance organizations. These MFI's are generally non-profit organizations with a philanthropic objective.

Microfinance is beneficial to poor people because they appear to have great influence on the ability to people to create real wealth and participate in the economy instead of being a parasite and only draw from the coffers of the state. Once again, however real hard data is somewhat elusive on some of the finer aspects of the benefits of these types of programs. "only a few studies have made serious efforts to compensate for the methodological challenges. In fact, many studies would not be regarded as meaningful by most professional econometricians. A new wave of randomized control trials are now in process, which should yield a more definitive picture (CGAP, nd).

What is Big Data?

Growing along the technology that allows its presence, big data has shown to be a useful idea in many sectors of life including financial services....

McGuire (2012) explained that "the use of Big Data is becoming a crucial way for leading companies to outperform their peers. In most industries, established competitors and new entrants alike will leverage data-driven strategies to innovate, compete, and capture value. Indeed, we found early examples of such use of data in every sector we examined."
To help understand how this tool can be used in micro-finance efforts it is important to learn more about what big data actually is and what are its components. Big data is the simply the use of huge amounts of information that is targeted to prove or disprove a certain idea or notion. Big data represents important information which can lead to discovery when new patterns and relationships are ultimately revealed when properly manipulated.

Computer technology is a much needed component of the use of big data. Gathering data in large sums and processing it requires digital assistance through the use of highly designed software and hardware technologies engineered to collect and sort through this immense collection of numbers, pictures, symbols and all other types of data that can be grouped together in a coherent mass.

It must be understood that data is not knowledge until it is processed and put into a useful purpose. Fisher (2013) agreed with this idea when she wrote "The data we can access now is mind-blowing and fantastic but we need to understand how that data can actually be used to produce actionable insights. This has been the task for data analysts for years: we are hardly talking about a new concept when we talk about data in this way. But with the advent of social technologies enabling a near-constant flow of data from individuals to connected sources, we need to understand how to use this public data, gathered without us even knowingly transmitting it." What is needed to make big data successful is the human element and its mysterious purpose working with the environment to help produce a natural and coherent program or system that maximizes resources and elevates all involved to a higher and more philanthropic state of being.

The human element in processing big data can be best exemplified by crowd sourcing certain large scale informational tasks. Computers, for all their benefit, cannot replace the reasoning and contextualizing abilities the human mind possesses. Bertolucci (2013) suggested that Crowdsourcing is useful vehicle for launching a big data platform and can save time and money. He wrote "according to the Intel Science and Technology Center (ISTC) for Big Data, crowdsourcing is becoming a popular way to accomplish tasks that computers aren't particularly good at, such as audio transcription, image annotation and document editing. But human-based solutions have their shortcomings as well."

Ultimately the incorporation of big data can really make an organization begin to operate at a much higher level. Accuracy and precision can be significantly increased to any organizational task with the proper application of big data. Trends and fads can now be practically analyzed and actually used to good use by demonstrating a controlling patterning element that is inherently contained within the many forms of information contained within big data.

Social Impact Bonds and The Rockefeller Foundation

To fully and deeply understand microfinance and its many components it is important to examine the leadership and motivation for this movement. The Rockefeller Foundation, and its use of a microfinance tool using big data called Social Impact Bonds, has provided a pathway to the incorporation of microfinance and the ability to lift poor neighborhoods into something better. According to Kohll et al. (2012) "Social Impact Bonds could significantly improve the quality of public services, save taxpayer money, and offer new approaches to providing social services without requiring government to assume all of the financial risk. But most importantly, SIBs could help give taxpayers significantly better returns for their investments."

Joseph (2012) recently wrote about the use of information and how social impact bonds, as directed by the Rockefeller Foundation has made significant progress towards its objectives and mission. He described the SIB structure as a "Win-win-win situation," where government, investors and non-profit organizations in which these bonds are eventually put into action all can reap benefits of this cooperative effort. This form of microfinance is one version of doing things but represents an empirical model upon which others can develop strategies.

Success in Microfinance With The Help Of Big Data

When the useful and practical application of big data is essentially infused with the social and cultural management of microfinance, both…